Introduction: History and Economics
1. E. A. G. Robinson, “Pigou, Arthur Cecil (1877–1959), Economist,” Dictionary of National Biography Archive, 1971, http://www.oxforddnb.com/view/olddnb/35529.
2. See Austin Robinson to Mark Blaug, November 10, 1992, Archives of the London School of Economics (hereafter LSE), London, United Kingdom, Blaug Papers, Blaug/3.
3. See Notes on Pigou’s Family, Austin Robinson Papers, Marshall Library of Economics, Cambridge, UK (hereafter MLE), EAGR 6/6/2 and EAGR 6/6/5.
4. Austin Robinson to D. W. Corrie, October 7, 1964, Austin Robinson Papers, MLE, EAGR 6/6/6, 151.
5. E. A. G. Robinson, “A.C. Pigou,” Times (March 9, 1959): 12.
6. For examples of this general trajectory of the Liberal disillusioned and discomfited by World War I, see the excellent biographies of G. M. Trevelyan and William Beveridge. David Cannadine, G.M. Trevelyan: A Life in History (New York: W. W. Norton & Company, 1992); José Harris, William Beveridge: A Biography (Oxford: Clarendon Press, 1977).
7. See John Maloney, The Professionalization of Economics: Alfred Marshall and Dominance of Orthodoxy (New Brunswick, NJ: Transaction, 1991): 91–119.
8. See the correspondence of librarians in 1959 in “Academic and Tutorial Records,” King’s College Archive, Cambridge (hereafter KCA) KCAC 6/1/11/36.
9. Richard Deacon, “The British Connection 2,” Guardian (May 30, 1979): 16.
10. N. Gregory Mankiw, “Smart Taxes: An Open Invitation to Join the Pigou Club,” n.d., http://www.economics.harvard.edu/files/faculty/40_Smart%20Taxes.pdf. The Pigou Club’s manifesto was published in the Wall Street Journal in 2006. N. Gregory Mankiw, “Opinion: Raise the Gas Tax,” Wall Street Journal (October 20, 2006), http://online.wsj.com/article/SB116131055641498552.html?mod=opinion_main_commentaries; N. Gregory Mankiw, “Rogoff Joins the Pigou Club,” September 16, 2006, Greg Mankiw’s Blog, http://gregmankiw.blogspot.com/2006/09/rogoff-joins-pigou-club.html.
11. In The General Theory, Keynes identified Pigou’s Theory of Unemployment as “the only detailed account of the classical theory of employment which exists.” J. M. Keynes, The General Theory of Employment, Interest and Money (New York: Harcourt, 1964): 7. See Gerhard Michael Ambrosi, Keynes, Pigou and Cambridge Keynesians: Authenticity and Analytical Perspective in the Keynes-Classics Debate (Houndmills, Basingstoke, UK: Palgrave Macmillan, 2003).
12. R. H. Coase, “The Problem of Social Cost,” Journal of Law and Economics 3 (October 1, 1960): 1–44. See also Nahid Aslanbeigui and Steven G. Medema, “Beyond the Dark Clouds: Pigou and Coase on Social Cost,” History of Political Economy 30, no. 4 (Winter 1998): 601–625; Steven G. Medema, Ronald H. Coase (London: Macmillan, 1994).
13. The term “Pigou Effect” was coined in 1948. See Don Patinkin, “Price Flexibility and Full Employment,” American Economic Review 38, no. 4 (September 1948): 543–564. For more on subsequent support for the Pigou Effect, see Serge Coulombe, “A Note on the Pigou Effect and the Liquidity Trap,” Journal of Post Keynesian Economics 10, no. 1 (October 1, 1987): 163–165; S. C. Tsiang, “Keynes’s ‘Finance’ Demand for Liquidity, Robertson’s Loanable Funds Theory, and Friedman’s Monetarism,” Quarterly Journal of Economics 94, no. 3 (May 1, 1980): 467–491; and Jacques Melitz, “Pigou and the ‘Pigou Effect’: Rendez-Vous with the Author,” Southern Economic Journal 34, no. 2 (October 1, 1967): 268–279.
14. David Collard was editor of a 1994 collection of Pigou’s works and a further 2002 two-voume set of some of Pigou’s journal articles. Collard’s introductions serve as good starting points for understanding Pigou’s work. Collard also produced other articles and chapters on Pigou. Nahid Aslanbeigui has written on Pigou since the early 1990s, alone and with Guy Oakes and Steven Medema. Aslanbeigui and Oakes published a book on Pigou in 2015. Gerhard Michael Ambrosi’s 2003 book, Keynes, Pigou and Cambridge Keynesians is a more technical reconstruction of Pigou’s thinking. There is also a burgeoning Japanese literature on Pigou, notably by Ryo Hongo and Norikazu Takami. Karen Knight and Michael McLure at the University of Western Australia, Perth, have also recently contributed to Pigovian literature. For lists of works by these scholars, see the Bibliography.
15. Donald Winch’s application of Cambridge School methods to the history of economics remains a touchstone. See Donald Winch, Riches and Poverty: An Intellectual History of Political Economy in Britain, 1750–1834 (Cambridge: Cambridge University Press, 1999); Donald Winch, Wealth and Life: Essays on the Intellectual History of Political Economy in Britain, 1848–1914 (Cambridge: Cambridge University Press, 2009). So too does Robert Skidelsky’s three-volume biography of John Maynard Keynes, published between 1983 and 2000. Emma Rothschild’s work in broadening contexts has similarly been influential, especially Economic Sentiments: Adam Smith, Condorcet, and the Enlightenment (Cambridge, MA: Harvard University Press, 2002). Other examples of recent work in this vein include Jeremy Adelman, Worldly Philosopher: The Odyssey of Albert O. Hirschman (Princeton, NJ: Princeton University Press, 2014); Angus Burgin, The Great Persuasion: Reinventing Free Markets Since the Depression (Cambridge, MA: Harvard University Press, 2012); Erik Grimmer-Solem, The Rise of Historical Economics and Social Reform in Germany, 1864–1894 (Oxford: Clarendon Press, 2003); Fredrik Albritton Jonsson, Enlightenment’s Frontier: The Scottish Highlands and the Origins of Environmentalism (New Haven, CT: Yale University Press, 2013); Nicholas Phillipson, Adam Smith: An Enlightened Life (New Haven, CT: Yale University Press, 2012); Timothy Shenk, Maurce Dobb: Political Economist (Houndmills, Basingstoke, UK: Palgrave Mac-millan, 2013). Daniel Stedman Jones, Masters of the Universe: Hayek, Friedman, and the Birth of Neoliberal Politics (Princeton, NJ: Princeton University Press, 2012).
1. “Marriage of Miss Lees,” Isle of Wight Times, November 23, 1876. See also “Tying the Knot,” Beyond the Graves, Ryde Social Heritage Group Newsletter 5, no. 4 (October 2010): 3.
2. Austin Robinson to Sir Harcourt Lees, n.d. [after 1959], MLE, EAGR 6/6/4. The former resident, Sir James Caldwell, (1770–1863), was a general in the service of the East India Company. R. H. Vetch, “Caldwell, Sir James Lillyman (1770–1863),” rev. Roger T. Stearn, Oxford Dictionary of National Biography (Oxford: Oxford University Press, 2004), http://www.oxforddnb.com/view/article/4385.
3. The unit was the Fifteenth (The East Yorkshire Riding) Regiment of Foot.
4. “Marriage of Miss Lees.”
5. The uncle was William Nassau Lees (1825–1889). H. M. Chichester, “Lees, William Nassau (1825–1889),” rev. Parvin Loloi, Oxford Dictionary of National Biography (Oxford: Oxford University Press, 2004), http://www.oxforddnb.com/view/article/16333.
6. Pigou’s ancestors came to England in the 1680s. An early ancestor, Frederick Pigou, was the chief “supercargo,” or trader, of Canton for the East India Company and later a director of the company. Another relative, Frederick John Pigou, was also a director of the company and of its bank. Marika Sherwood and Kathy Chater, “The Pigou Family across Three Continents,” Proceedings of the Huguenot Society 28, no. 3 (2005): 408–413.
7. The disinherited uncle was Frederick John Pigou (1815–1847). Knowledge of early Pigous has benefited from an active genealogical interest on the part of their descendants. See “The Pigou Family,” last modified 2011, http://www.piggin.org/charts/pigou.htm. M. G. Dauglish and P. K. Stephenson, eds. Harrow School Register 1800–1911 (London: Longmans, Green, and Co., 1911): 132.
8. Oldham married Clarence’s eldest sister, Ella Frances Emma Pigou. The Army List (London: Royal Stationers, September 1902): 1405.
9. Sherwood and Chater, “The Pigou Family Across Three Continents,” 410–411.
10. “Marriage of Miss Lees.” After short service as a lieutenant starting in 1869, there is no indication that Clarence worked. In census records, Clarence’s profession is listed as “Late 15th Regiment.” Census Returns of England and Wales, 1881, Kent, The National Archives of the United Kingdom, Kew, United Kingdom (hereafter TNA), RG11/923/28, 8. “India-Office, March 7,” Morning Post, tMarch 8, 1876, 6.
11. Austin Robinson thought Pigou’s “Christian name” was probably Cecil and that his first name, Arthur, was merely a way of differentiating C(ecil) from his father, C(larence). Austin Robinson to Mark Blaug, November 10, 1992, Blaug Papers, LSE, Blaug/3.
12. The Leeses were among Ryde’s wealthiest residents, and Beachlands was furnished with “VALUABLE CONTENTS,” including nine gilt Louis XVI armchairs, “a massive ormolu inkstand from the Tuileries, Crown Derby, Dresden, and Oriental China, and 1100 ounces of silver plate.” “Beachlands,” Isle of Wight Observer, August 1892, http://www.historicrydesociety.co.uk/history/royal-victoria-arcade/ryde-houses/beachlands/.
13. Census Returns of England and Wales, 1881, Kent, TNA, RG11/923/28, 8.
14. Census Returns of England and Wales, 1891, Kent, TNA, RG12/683/114, 3.
15. At the time of publication, The Larches was known as “Sunhill Court” and was part of a retirement community. See also, Tunbridge Wells Borough Council, “Draft Review: Pembury Conservation Area Appraisal,” August 2007, accessed Feburary 14, 2014, http://consult.tunbridgewells.gov.uk/portal/planning_information/spp/drp/.
16. “Those in Authority: Arthur Cecil Pigou,” Granta 13, no. 281 (April 28, 1900): 656.
17. A.C. Pigou, “F.E.M.” Harrovian 35, no. 6 (October 21, 1922): 78.
18. Christopher Tyerman, A History of Harrow School 1324–1991 (Oxford: Oxford University Press, 2000): 377.
19. See Colin Shrosbree, Public Schools and Private Education: The Clarendon Commission, 1861–64, and The Public Schools Acts (Manchester: Manchester University Press, 1988): chapter 6.
20. “Notices,” Harrovian 2, no. 1 (February 7, 1889): 135. Originally housing seven boys, Newlands grew over Pigou’s tenure at Harrow, becoming home to forty-two by 1904. “Newlands: History of the House,” accessed January 20, 2014, http://www.harrowschool.org.uk/1702/boarding/newlands/history-of-the-house.
21. Tyerman, Harrow School, 359–360.
22. Ibid.
23. Ibid., 358, 376. This did not mean that all its students came from upper class backgrounds. Indeed, earning potential was becoming increasingly important for new graduates. Of the 1890 entrants to Harrow, 37 percent went into military service; 17 percent into law; and 23 percent into business, banking, or trade. Ten years later, 25 percent went into the service, 14 percent into law, and 30 percent into business or banking. On the connection of earning and the concept of the gentleman, see Martin J. Wiener, English Culture and the Decline of the Industrial Spirit, 1850–1980 (Cambridge: Cambridge University Press, 1981).
24. Tyerman, Harrow School, 376.
25. J. W. Jenkins to Austin Robinson, September 27, 1964, MLE, EAGR 6/6/6.
26. Pigou, “F.E.M,” 78.
27. “Harrow in the Holidays,” The Harrovian 6, no. 2 (March 25, 1893): 13.
28. Pigou, “F.E.M.,” 78.
29. Francis Edward Marshall (1848–1922) came from a prominent family that split its time between Leeds and Keswick in the Lake District. W. N. Bruce, “F.E.M.,” Harrovian 35, no. 6 (October 21, 1922): 77–78.
30. Edward Graham, The Harrow Life of Henry Montagu Butler, D.D. (London: Longmans, Green and Company, 1920): 275.
31. Life at Harrow was dramatically depicted by Old Harrovian Arnold Lunn in his 1913 novel, The Harrovians: A Tale of Public School Life (London: Smith, Elder and Co., 1913).
32. “Founder’s Day,” Harrovian 8, no. 8 (October 19, 1895): 97.
33. J. W. Jenkins to Austin Robinson, September 27, 1964, Austin Robinson Papers, MLE, EAGR 6/6/6.
34. Ibid. Jenkins misremembered that Pigou’s mother had died and that Pigou was “the only son . . . without women’s company.” Pigou’s mother did not die until 1902, and Pigou had both a sister and brother, though both might have been at school when Jenkins visited.
35. Pigou won the Rev. R. Davies, Matfield Grange, and Staplehurst prizes. “Honours and Prizes,” Harrovian 4, no. 3 (April 30, 1891): 27. “Those in Authority: Arthur Cecil Pigou,” 656; “Honours and Prizes,” Harrovian 5, no. 3 (April 9, 1892): 25.
36. Mary Moorman, George Trevelyan: A Memoir (London: Hamish Hamilton, 1980): 23–24.
37. “Here and There,” Harrovian 7, no. 4 (May 8, 1894): 30.
38. On Pigou’s bout with pugilism, see “Gymnasium,” Harrovian 7, no. 2 (March 17, 1894): 25. On cricket, see J. W. Jenkins to Austin Robinson, September 27, 1964, Austin Robinson Papers, MLE, EAGR 6/6/6.
39. “Debating Society,” Harrovian 8, no. 9 (November 21, 1895): 112; Debating Society,” Harrovian 9, no. 1 (February 22, 1896): 10.
40. “Debating Society News,” Harrovian 7, no. 8 (November 15, 1894): 103.
41. See chapter 14 of Tyerman, Harrow School, 355–402.
42. Edward Whymper (1840–1911), who led the first ascent of the Matterhorn in 1865, spoke at Harrow in early 1894. “Lecture on Mountaineering,” Harrovian 7, no. 2 (March 17, 1894): 20–21. For the Royal Navy talk, see “Royal Navy,” Harrovian 7, no. 9 (December 14, 1894): 110. The debating society held a debate inspired by the talk, on whether, if war were declared with France, the Mediterranean were to be evacuated. “Debating Society News,” Harrovian 8, no. 3 (April 6, 1895): 27.
43. Gerard Clarence Pigou “Pigou, Gerard Clarence,” Executive Officers’ Services. Dates of Entry: 1893–1896, TNA, ADM 196/45/61; Navy List (February 1896): 252.
44. “Debating Society News,” Harrovian 7, no. 8 (November 15, 1894): 103.
45. Aslanbeigui rightly suggests that contemporary evaluations of Pigou’s misogyny should be tempered by historical circumstance. As will be outlined later, however, Pigou’s opinion of women was unusual even in his context. Nahid Aslanbeigui, “Rethinking Pigou’s Misogyny,” Eastern Economic Journal 23, no. 3 (Summer 1997): 301–316.
46. “Debating Society,” Harrovian 9, no. 2 (March 27, 1896): 19.
47. Although such debates had political implications, many others were much more explicitly concerned with contemporary politics. For instance, five days before the discussion on Charles I there was a debate—”the most animated of the term” on the motion that “Lord Salisbury’s action as Foreign Secretary during the present administration is worthy of severe censure.” The motion was rejected by fourteen votes to eight, showing support for Salisbury’s Conservative administration.
48. At the end of his penultimate year, Pigou was first in his form and recited a speech by Lord Beaconsfield on conservative principles to the school and a visiting member of the royal family, the Duchess of Teck. Pigou also won the Fortescue Prize and the Clayton Prize. “Here and There,” Harrovian 8, no. 6 (July 3, 1895): 70; “Prize List,” Harrovian 8, no. 4 (May 23, 1895): 48. “Speech Day,” Harrovian 8, no. 7 (July 27, 1895): 85.
49. “Here and There,” Harrovian 8, no. 8 (October 19, 1895): 97.
50. On the appointments, see “Here and There,” Harrovian 8, no. 9 (November 21, 1895): 112; “Musical Society,” Harrovian 8, no. 8 (October 19, 1895): 104. On Pigou’s tone deafness, see J. W. Jenkins to Austin Robinson, September 27, 1964, MLE, EAGR 6/6/6.
51. The Mission was founded in Nottingdale, West London, in 1883. Few Harrovians were actively involved, but many contributed money. Tyerman, Harrow School, 183.
52. “Debating Society,” Harrovian 8, no. 9 (November 21, 1895): 112.
53. Ibid.
54. “Debating Society,” Harrovian 9, no. 1 (Februrary 22, 1896): 10. After Pigou was no longer president, he commented that because of low participation, the Debating Society “seems to be in a very bad way indeed.” Remarking that “forced debates are as insipid as forced strawberries,” he suggested new formats and rules. “To the Editors of the Harrovian,” Harrovian 9, no. 9 (December 19, 1896): 112.
55. “Debating Society,” Harrovian 9, no. 1 (Februrary 22, 1896): 10. Leander Starr Jameson, a colonial administrator of the Cape Colony in what is now South Africa, had launched a botched raid at in late 1895 on the Boer-controlled Transvaal Republic to incite an uprising of British workers. Jameson did not succeed in destabilizing the Afrikaaner-controlled state, but he mobilized nationalistic sentiment.
56. Ibid.
57. “Founder’s Day,” Harrovian 8, no. 8 (October 19, 1895): 97.
58. The speech was “The Slavonic Provinces of the Ottoman Empire,” which Gladstone delivered at Hawarden, Wales, on January 16, 1877. At Speech Day, Pigou shared the stage with classmate Maharaj Singh (1878–1959), an Indian prince who became the first governor of Bombay State and who recited a piece by the Whig, Lord Macaulay (1800–1859). “On Speech Day,” Harrovian 9, no. 6 (July 25, 1896): 66.
59. Pigou won the Neeld Prize, the Problem Prize, the Lady Bourchier Reading Prize, the Mix Copies Prize, and the “On Leaving Harrow” Prize. See “Here and There,” Harrovian 9, no. 3 (May 23, 1896): 30; “Here and There,” Harrovian 9, no. 5 (July 1, 1896): 56; “Prize List,” Harrovian 9, no. 7 (October 24, 1896): 81.
60. See Sheldon Rothblatt, The Revolution of the Dons: Cambridge and Society in Victorian England (Cambridge: Cambridge University Press, 1981).
61. Christopher N. L. Brooke, A History of the University of Cambridge, Volume IV, 1870–1990 (Cambridge: Cambridge University Press, 1993), 247.
62. Brooke, A History of Cambridge, 240–252.
63. Quoted in Brooke, A History of Cambridge, 289.
64. Elisabeth Leedham-Green, A Concise History of the University of Cambridge (Cambridge: Cambridge University Press, 1996), 181.
65. Ibid., 162. These were Theology, Semitic Languages, Indian Languages, Oriental Languages, Medieval Languages, Modern Languages, and Mechanical Sciences. Only one (the splitting of History and Law) had been introduced in the previous twenty years.
66. By 1900, the number of graduates passing the Natural Science Tripos was 20 percent higher than the number passing Classics. Leedham-Green, A Concise History of Cambridge,162.
67. See Leedham-Green, A Concise History of Cambridge, chapter 5; Rothblatt, The Revolution of the Dons. On women, see Brooke, A History of Cambridge, chapter 9.
68. Brooke, A History of Cambridge, 293.
69. Ibid., 229. The Cambridge grading system of undergraduate degrees has five tiers. At the bottom, there is an ordinary degree, or a “pass.” Then, in ascending order, come third-class honors (Third); second-class honors, lower division (2:2); second-class honors, upper division (2:1); and first-class honors (First).
70. Brooke, A History of Cambridge, 229–230.
71. Ibid, 232. See also P. R. H. Slee, Learning and a Liberal Education: The Study of Modern History in the Universities of Oxford, Cambridge and Manchester, 1800–1914 (Manchester: Manchester University Press, 1986), 71–83.
72. Brooke, A History of Cambridge, 36. On Browning and teachers’ colleges, see Pam Hirsch and Mark McBeth, Teacher Training at Cambridge: The Initiatives of Oscar Browning and Elizabeth Hughes (London: Woburn Press, 2004). For a biography of Browning, see Ian Anstruther, Oscar Browning: A Biography (London: John Murray, 1983).
73. Brooke, A History of Cambridge, 36.
74. Leedham-Green, A Concise History of Cambridge, 173; Anstruther, Oscar Browning, 55–66.
75. Brooke, A History of Cambridge, 89.
76. Ibid., 465. See also P. Searby, The Training of Teachers in Cambridge University: The First Sixty Years, 1879–1939 (Cambridge: Cambridge University Press, 1982), 36–37.
77. “Union Notes,” Granta 10, no. 193 (October 24, 1896): 20–21.
78. Pigou to Oscar Browning, June 24 [n.d.], The Papers of Oscar Browning, KCA, OB/1/1281/A.
79. Pigou to Oscar Browning, n.d. [1897–99], Browning Papers, KCA, OB/1/1281/A.
80. Pigou to Oscar Browning, n.d. [1897–99], Browning Papers, KCA OB/1/1281/A.
81. Browning was a diligent correspondent, writing from his lengthy holidays in Florence or the Alps. Though he cut a wide figure, The O.B. was also a nominal mountaineer—a member of the Alpine Society—and Pigou was invited to join his expeditions. Pigou to Oscar Browning, September 23, [1897–99], Browning Papers, KCA, OB/1/1281/A.
82. Pigou to Oscar Browning, April 5, [1897–99], Browning papers, KCA, OB/1/1281/A.
83. Ibid.
84. Pigou to John Tresidder Sheppard. July 24, 1903, The Papers of John Tresidder Sheppard, KCA JTS/2.160.
85. A.C. Pigou, “Undergraduate History Notes,” n.d., Arthur Cecil Pigou Papers, MLE, Pigou 1/2.
86. Ibid. Alfred Marshall admired Herbert Spencer and other social Darwinists and, unlike Sidgwick, thought of ethics as inherently evolutionary along the lines of Hegel. On Marshall and evolutionary theory, see Peter Groenewegen, A Soaring Eagle: Alfred Marshall 1842–1924 (Aldershot, UK: Edward Elgar, 1995): 479–485, 499, 510–511. On Marshall’s evolutionary ethics, see Donald Winch, Wealth and Life: Essays on the Intellectual History of Political Economy in Britain, 1848–1914 (Cambridge: Cambridge University Press, 2009): 242–243.
87. E. A. G. Robinson, “Pigou, Arthur Cecil (1877–1959), Economist,” Dictionary of National Biography Archive, 1971, http://www.oxforddnb.com/view/olddnb/35529. “Lectures Proposed by the Special Board for History and Archaeology,” Cambridge University Reporter 29, no. 2 (October 8, 1898): 17–18. John Rawls described The Methods of Ethics as “the outstanding achievement in modern moral theory . . . the first truly academic work in moral theory, modern in both method and spirit.” Yet as Sidgwick scholar J. B. Schneewind observed, Methods was very much “also a mid-Victorian work.” John Rawls and Samuel Richard Freeman, Lectures on the History of Political Philosophy (Cambridge, MA: Harvard University Press, 2007): 378; J. B. Schneewind, Sidgwick’s Ethics and Victorian Moral Philosophy (Oxford: Oxford University Press, 1977). See also Roger E. Backhouse, “Sidgwick, Marshall, and the Cambridge School of Economics,” History of Political Economy 38, no. 1 (Spring 2006): 15–44.
88. Henry Sidgwick, The Methods of Ethics (London: Macmillan, 1907): 89.
89. Sidgwick warranted that other ideals might be conceptualized as related to the ultimate end; he specifically mentioned “Goodness, Perfection, or Excellence of Human Existence.” Yet Sidgwick did not see these more nebulous values as having a claim to being “ultimate goods.” Instead, he fitted them into a utilitarian framework by suggesting that they were constitutive of pleasure, the one true good. Ibid.,102; Schneewind, Sidgwick’s Ethics, 322–327.
90. “Concerning Speaking at the Union,” Granta 12, no. 252 (February 11, 1899): 178.
91. Austin Robinson to J. W. Jenkins, September 24, 1964, Austin Robinson Papers, MLE, EAGR 6/6/6.
92. “Union Notes,” Granta 12, no. 262 (May 27, 1899): 344–345; “Union Notes,” Granta 13, no. 270 (November 18, 1899): 470–471; “Union Notes,” Granta 13, no. 277 (February 17, 1900): 578–579
93. “Those in Authority: Arthur Cecil Pigou,” 656.
94. “Union Notes,” Granta 12, no 254 (February 18, 1899): 198–199.
95. “Union Notes,” Granta 13, no. 273 (January 20, 1900): 517.
96. “Those in Authority: Arthur Cecil Pigou,” 656.
97. Ibid.
98. On the monarchy, see “Union Notes,” Granta 12, no. 262 (May 27, 1899): 344–345; on democratic government, see “Union Notes,” Granta 12, no. 258 (April 27, 1899): 283–284; on the theater incident, see “Union Notes,” Granta 13, no. 270 (November 18, 1899): 470–471. Pigou called for the university authorities to close the theater as many “intoxicated” undergraduates were making “obscene remarks.” The offenders were men who wished to “prove they were men by showing they had ceased to be gentlemen.”
99. On the issue of colleges (whether Oxford and Cambridge should not seek to reduce the autonomy of individual colleges), see “Union Notes,” Granta 13, no. 277 (February 17, 1900): 578–579; on the Dreyfus Affair, see “Union Notes,” Granta 11, no. 228 (February 12, 1898): 183–184; “Union Notes,” Granta 12, no. 245 (October 29, 1898): 38–39.
100. “Union Notes,” Granta 13, no. 277 (February 17, 1900): 578–579; “Union Notes,” Granta 13, no. 278 (February 24, 1900): 593–594.
101. This may have been hyperbolic and self-consciously provocative, since relations between Pigou and Browning had frayed by this point, as explained below. From Cambridge Review, May 30, 1901. Quoted in Alon Kadish, Historians, Economists, and Economic History (London: Routledge, 1989): 192.
102. “Union Notes,” Granta 12, no. 259 (May 6, 1899): 296. On China, see “Union Notes,” Granta 10, no. 193 (October 24, 1896): 20–21; “Union Notes,” Granta 10, no. 195 (November 7, 1896): 54–55.
103. The supporter in question was S. C. Cronwright-Schreiner. “Union Notes,” Granta 13, no. 279 (March 10, 1900): 620–621.
104. “Union Notes,” Granta 13, no. 286 (June 2, 1900): 731–732.
105. Opposition to imperialism was one of the key elements of the so-called new liberalism, discussed below. For an overview, see Peter Clarke, Liberals and Social Democrats (Cambridge: Cambridge University Press, 1978): chapter 3. On liberal imperialists, see H. C. G. Matthew, Liberal Imperialists: The Ideas and Politics of a Post-Gladstonian Elite (Oxford: Oxford University Press, 1973). See also Jennifer Pitts, A Turn to Empire: The Rise of Imperial Liberalism in Britain and France (Princeton, NJ: Princeton University Press, 2005).
106. On popular support for free trade, see Frank Trentmann, Free Trade Nation: Commerce, Consumption, and Civil Society in Modern Britain (Oxford: Oxford University Press, 2008), especially 27–33.
107. Marshall wrote Browning that Pigou “did not come to my lectures in his first year: but before coming to them in his second year he had read my Principles [The Principles of Economics], through; & he adds that he had read my Economics of Industry . . .’some time ago.’” At the top of the same letter, Marshall scrawled: “Pigou has just come in. He tells me that the entry ‘some time ago’ . . . means ‘at school’” Alfred Marshall to Oscar Browning, October 28, 1903, Browning Papers, KCA, OB/1/1062/C. This scrawling is not noted in the letter published in The Correspondence of Alfred Marshall, Economist, 3 volumes, ed. John Whitaker (Cambridge: Cambridge University Press, 1996): III, 67–68.
108. Pigou wrote that he was reading “Political Economy.” It is likely that he meant Sidgwick’s Principles of Political Economy (1883), which he found “not nearly as bad as” the other book he was reading, Henry Hallam’s Constitutional History of England. Pigou to Oscar Browning, September 23, 1898, Browning Papers, KCA, OB/1/1281/A. On Ashley, see Pigou to Oscar Browning, June 22, 1898, Browning Papers, KCA, OB/1/1281/A.
109. Pigou to Oscar Browning, September 22 [1898], Browning Papers, KCA, OB/1/1281/A.
110. “Union Notes,” Granta 10, no. 205 (February 27, 1897): 218–219.
111. “Union Notes,” Granta 10, no. 203 (February 13, 1897): 184–185; “Union Notes,” Granta 10, no. 213 (May 29, 1897): 352–353. The first debate of Pigou’s second year, in which he did not take part, was also about trade unions. “Union Notes,” Granta 11, no. 218 (October 23, 1897): 25–26.
112. “Union Notes,” Granta 11, no. 225 (January 22, 1898): 135–136.
113. Ibid.
114. Alfred Marshall to Herbert Foxwell, February 14, 1902, in The Correspondence of Alfred Marshall, II, 359.
115. Pigou won the Chancellor’s gold medal for English verse. Harry G. Johnson, “Arthur Cecil Pigou, 1877–1959,” Canadian Journal of Economics and Political Science / Revue canadienne d’Economique et de Science politique 26, no. 1 (February 1, 1960): 150–155.
116. Alfred Marshall to Oscar Browning, May 15, 1903, in The Correspondence of Alfred Marshall, III, 10–11.
117. The letter was written from Hotel de France, Saint-Pol-de-Léon, Brittany. Pigou to Oscar Browning, August 2, 1899, Browning Papers, KCA, OB/1/1281/A.
118. The books recommended for the Political Economy syllabus were Bagehot, Lombard Street; Bastable, Theory of International Trade; Dunbar, The Theory and History of Banking; Jevons, Money and the Mechanism of Exchange; Keynes, Scope and Method of Political Economy; Marshall, Principles of Economics, Vol. 1; Plehn, Introduction to Public Finance; and Sidgwick, Principles of Political Economy, Introduction and Book III. There was a much longer list of books “which may be read with advantage.” See appendix B to chapter 15 of Groenewegen, A Soaring Eagle, 563–564.
119. “Those in Authority: Arthur Cecil Pigou,” 656.
120. J. M. Keynes, “Alfred Marshall, 1842–1924,” in The Memorials of Alfred Marshall, edited by A. C. Pigou (London: Macmillan, 1925), 2. See also chapter 18 of Groenewegen, A Soaring Eagle, 660–701.
121. Keynes, “Alfred Marshall, 1842–1924,” 2.
122. Pigou to Oscar Browning, April 12, 1900, Browning Papers, KCA, OB/1/1281/A.
123. “Lectures Proposed by the Special Board for History and Archaelogy 1898–1899,” Cambridge University Reporter 29, no. 2 (October 8, 1898): 17–18; “Lectures Proposed by the Special Board for History and Archaelogy 1899–1900,” Cambridge University Reporter 30, no. 2 (October 7, 1899): 18–19.
124. Herbert Foxwell referred to the movement as characterized by “the historic feeling.” H. S. Foxwell, “The Economic Movement in England,” Quarterly Journal of Economics 2, no. 1 (October 1887): 89. On the meanings of “the historical school,” see Erik Grimmer-Solem, The Rise of Historical Economics and Social Reform in Germany 1864–1894 (Oxford: Clarendon Press, 2003), chapter 1; Erik Grimmer-Solem and Roberto Romani, “The Historical School, 1870–1900: A Cross-National Reassessment,” History of European Ideas 24, nos. 4–5 (1998): 267–299; Gerard M. Koot, English Historical Economics, 1870–1926: The Rise of Economic History and Neomercantilism (Cambridge: Cambridge University Press, 1987); and A. W. Coats, “The Historist Reaction in English Politicial Economy, 1870–1890,” Economica 21, no. 82 (May 1954): 143–153.
125. On the disputes between schools of economic thought in Cambridge and Britain, see Kadish, Historians, Economists, and Economic History.
126. See Koot, English Historical Economics.
127. On Foxwell’s status as an English Historical Economist, see Gerard M. Koot, “H.S. Foxwell and English Historical Economics,” Journal of Economic Issues 11, no 3 (September 1977): 561–586.
128. On Marshall’s German philosophical influecnes, see Simon Cook, The Intellectual Foundations of Alfred Marshall’s Economic Science: A Rounded Globe of Knowledge (Cambridge: Cambridge University Press, 2009), especially chapter 6, “A Philosophy of History.” On evolution in Marshall’s thinking, see Tiziano Raffaelli, Marshall’s Evolutionary Economics (London: Routledge, 2003). On Cunningham, see Koot, English Historical Economics, 135–155; John Maloney, The Professionalization of Economics: Alfred Marshall and Dominance of Orthodoxy (New Brunswick, NJ: Transaction, 1991), 91–119.
129. On the professionalization of Marshallian economics, see Maloney, The Professionalization of Economics.
130. Alfred Marshall, Principles of Economics, eighth ed. (London: Palgrave Macmillan, 2013 [1920]): xxi.
131. For an overview of English historical school and Marshallian economics, see Roger E. Backhouse, The Penguin History of Economics (London: Penguin, 2002): 177–182. See also Koot, English Historical Economics, especially chapters 6 and 7.
132. Marshall’s influence grew as his intellectual rivals left the country. Ashley departed for North America in 1888 for several years, and Cunningham followed in 1899. See Katherine Harris, “The Rise and Fall of the Practical Man: Debates over the Teaching of Economics at Harvard, 1871–1908” A.B. thesis, Harvard University, 2010; Tiziano Raffaelli, Giacomo Becattini, Katia Caldari, and Marco Dardi, eds., The Impact of Alfred Marshall’s Ideas: The Global Diffusion of His Work (Cheltenham, UK: Edward Edgar, 2010).
133. H. S. Foxwell, “The Economic Movement in England,” Quarterly Journal of Economics 1, no.1 (1887): 92. On Marshall and the Cambridge school, see Groene-wegen, A Soaring Eagle, 753–762.
134. Marshall was the father of the concept of substitution at the margin. See Keynes, “Alfred Marshall, 1842–1924,” 39.
135. Marshall, Principles of Economics.
136. A. C. Pigou, “Looking Back from 1939” in Essays in Economics (London: Macmillan, 1952): 7.
137. This is the thesis of Roger E. Backhouse and Tamotsu Nishizawa, eds. No Wealth but Life, (Cambridge: Cambridge University Press, 2010). According to Groenewegen, Marshall’s “life . . . illuminates Victorian middle-class reactions to socialism, alternatively recoiling in horror from its more extreme prescriptions while revealing simultaneous fascination with the new intellectual and social visions it opened up.” Groenewegen, A Soaring Eagle, 4.
138. For a concise treatment, see Dorothy Ross, “Changing Contours of the Social Science Disciplines,” in The Cambridge History of Science Volume 7: The Modern Social Sciences, ed. Theodore M. Porter and Dorothy Ross (Cambridge: Cambridge University Press, 2003): 203–237. See also Grimmer-Solem, The Rise of Historical Economics; Andrew Jewett, Science, Democracy, and the American University: From the Civil War to the Cold War (New York: Cambridge University Press, 2012); Reba N. Soffer, Ethics and Society in England: The Revolution in the Social Sciences, 1870–1914 (Berkeley: University of California Press, 1978); Rothblatt, The Revolution of the Dons; Peter Wagner, Bjorn Wittrock, and Hellmut Wollmann, “Social Sciences and Modern States,” in Social Sciences and Modern States: National Experiences and Theoretical Crossroads, ed. Peter Wagner, Carol H.Weiss, Bjorn Wittrock, and Hellmut Wollmann (Cambridge: Cambridge University Press, 1991): 28–85.
139. On ideology and Marshall’s economics, see Maloney, The Professionalization of Economics, chapters 9 and 10.
140. Marshall developed a cautiously optimistic position on the state’s role in providing assistance to the poor and aged and in 1910, after retirement, wrote a proposal for a Cambridge program in social work, sharing it with Pigou privately, who in turn shared it with John Maynard Keynes and others. J. M. Keynes to Alfred Marshall, July 10, 1910, in The Correspondence of Alfred Marshall, III, 253. On Marshall’s attitudes toward state assistance, see Peter Groenewegen, “Marshall on Welfare Economics and the Welfare State,” in Backhouse and Nishizawa, No Wealth but Life, 25–41. In a 1907 article titled “Social Possibilities of Economic Chivalry,” Marshall called for the state to be “up and doing” in providing services that anticipated those of Britain’s postwar welfare state. Groenewegen, A Soaring Eagle, 570–611; Winch, Wealth and Life, 237–241.
141. Alfred Marshall, Industry and Trade (London: Macmillan, 1919): vii. Writing to F. Y. Edgeworth after the publication of the latter’s New and Old Methods of Ethics, Marshall noted: “I think there is room for question whether the utilitarians are right in assuming that the end of action is the sum of the happiness of individuals rather than the vigorous life of the whole.” Alfred Marshall to F. Y. Edgeworth, March 28, 1880, in The Correspondence of Alfred Marshall, I, 124.
142. Marshall defined the national dividend as the sum of a country’s production of goods and services in a given year, while the American Irving Fisher counted only those goods and services that were consumed in a year. The descendents of these approaches remain alternative measures of GDP. On economic statistics, especially in America, see Thomas A. Stapleford, The Cost of Living in America: A Political History of Economic Statistics, 1880–2000 (Cambridge: Cambridge University Press, 2009).
143. Marshall, Principles of Economics, 714.
144. “Moral Sciences Tripos, Part II, 1900,” Cambridge University Reporter 30, no. 40 (June 12, 1900): 1039. Pigou was one of three sitters, out of six, who took a First. He took the examinations in Ethics and Political Philosophy and in Advanced Political Economy.
145. In the preface, Pigou wrote, “[I have made] no attempt to distinguish Browning’s religion from his philosophy, but have interpreted the phrase ‘religious teacher’ in the widest possible sense.” Drawing from Browning’s poetry and essays, Pigou evaluated Browning’s philosophy on internal consistency. A. C. Pigou, Robert Browning as a Religious Teacher: Being the Burney Essay for 1900 (Cambridge: C. J. Clay and Sons, 1900). Michael McLure suggests that in dealing with “states of consciousness,” the Browning essay is consistent with Pigou’s later assertion that “welfare” was to be found in states of consciousness only. Michael McLure, “Assessments of A.C. Pigou’s Fellowship Theses,” Discussion Paper 10.22 (Perth: Business School, University of Western Australia, 2010), http://www.business.uwa.edu.au/__data/assets/pdf_file/0015/1326111/10–22_Assessments_of_AC_Pigous_Fellowship_Theses.pdf.
146. Pigou’s essay on Browning won the Burney Prize, awarded “on some metaphysical subject.” His essay on economics, “The Causes and Effects of Changes in the Relative Values of Agricultural Produce in the United Kingdom during the Last Fifty Years,” won the Cobden Prize, given every three years for work relating to political economy. Robert Potts, Cambridge Scholarships and Examinations (London: Longmans, Green, and Co., 1883): xii, xxii. One of the three examiners for the Cobden Prize was Alfred Marshall. See “The Cobden Prize, 1901,” Cambridge University Reporter 30 no. 37 (1304) (May 29, 1900): 922.
147. Pigou to Oscar Browning, n.d. [1900–1901], KCA, Browning Papers, OB/1/1281/A. Kadish, Historians, Economists, and Economic History, 192.
148. Letter from Alfred Marshall to J. N. Keynes, March 4, 1900, in The Correspondence of Alfred Marshall, Economist, II, 269–270.
149. Alfred Marshall to Oscar Browning, October (24?), 1900, in The Correspondence of Alfred Marshall, II, 289–290.
150. A. C. Pigou, “Economic Crises by Edward D. Jones,” Economic Journal 10, no. 40 (December 1900): 523–526; A. C. Pigou, “The Despatches and Correspondence of John, Second Earl of Buckinghamshire, Ambassador to the Court of Catherine II of Russia, 1762–5 by Adelaide D’Arcy Collyer,” Economic Journal 11, no. 41 (March, 1901): 77. In 1900–1901, Pigou reviewed a total of eight books for The Economic Journal, ranging from The Science of Civilization (Cecil Balfour Phipson) to Social Justice (Westel Woodbury Willoughby) to Government in Switzerland (John Martin Vincent).
151. Pigou to Oscar Browning, n.d. [1901], Browning Papers, KCA, OB/1/1281/A.
152. Electors to Fellowship Committee Meeting Minutes, October 13, 1900, KCA, KCGB/6/14/1/1. Seven candiates submitted dissertations, and four were nominated. Arthur William Hill, a botanist, and Charles Edward Inglis, an engineer, were elected with thirteen and eleven votes, respectively. Pigou came in third with five votes. Electors to Fellowship Committee Meeting Minutes, March 16, 1901, KCA, KCGB/6/14/1/1.
153. A. C. Pigou “The Causes and Effects of Changes in the Relative Values of Agricultural Produce in the United Kingdom During the Last Fifty Years” (Cambridge: King’s College, 1901), Arthur Cecil Pigou Papers, MLE, Pigou 1/3, ii.
154. Four candidates were nominated by fellows in 1902, of which three, the logician William Ernest Johnson, music scholar Edward Joseph Dent, and Pigou, were elected. Pigou and Johnson both received fifteen votes; Dent received eight. A Mr. Filon received only seven and was not elected. Electors to Fellowship Committee Meeting Minutes, March 15, 1902, KCA, KCGB/6/14/1/1.
155. See Groenewegen, A Soaring Eagle, 443–493, 531–561; see also the final three chapters of Kadish, Historians, Economists, and Economic History, 128–245; and Maloney, The Professionalization of Economics, 226–229.
156. Alfred Marshall to Oscar Browning, October 28, 1903, in The Correspondence of Alfred Marshall, III, 67.
157. Alfred Marshall to Joseph Robson Tanner, May 20, 1903, in The Correspondence of Alfred Marshall, III, 13.
158. Marshall to J. N. Keynes, January 8, 1901, quoted in Kadish, Historians, Economists, and Economic History, 193. See also “Lectures Proposed by the Special Board for Economics and Politics, 1904–1905,” Cambridge University Reporter 35 no. 2 (October 8, 1904): 21–22.
159. In Alon Kadish’s words, “Pigou was safe, loyal and unquestionably competent.” Kadish, Historians, Economists, and Economic History, 193.
160. Alfred Marshall to Oscar Browning, May 1, 1901, in The Correspondence of Alfred Marshall, II, 311–312.
161. Marshall married a former student, Mary Paley. Alfred Marshall to J. N. Keynes, January 30, 1902, in The Correspondence of Alfred Marshal, II, 350.
162. A. C. Pigou, Alfred Marshall and Current Economic Thought (London: Macmillan, 1952): 64; Robinson, “Pigou, Arthur Cecil (1877–1959), Economist.”
163. A. C. Pigou, “Presidential Address,” Economic Journal 39, no. 194 (June 1939): 219.
Chapter 2: Ethics, Politics, and Science
1. Alfred Marshall, Principles of Economics, eighth ed. (London: Palgrave Macmillan, 2013 [1920]): xix.
2. On the history of “economic man” see Mary Morgan, “Economic Man as Model Man: Ideal Types, Idealization, and Caricatures,” Journal of the History of Economic Thought 28, no. 1 (March 2006): 1–27.
3. A. C. Pigou, Economic Science in Relation to Practice (London: Macmillan, 1908): 8.
4. Ibid., 11.
5. Ibid., 12.
6. Pigou to Oscar Browning, n.d. [1905–6], KCA, The Papers of Oscar Browning, OB/1/1281/A.
7. D. W. Corrie to John Saltmarsh, February 19, 1960, Papers Relating to A. C. Pigou, KCA, ACP/1/Corrie.
8. Ibid.
9. Pigou to Oscar Browning, n.d. [1901], Browning Papers, KCA, OB/1/1281/A.
10. Avner Offer, Property and Politics 1870–1914: Landownership, Law, Ideology and Urban Development in England (Cambridge: Cambridge University Press, 1981): 337.
11. “Account of a day in 1906,” July 12, 1906, The Papers of John Tresidder Sheppard, KCA, JTS/1/8.
12. Pigou commented on Keynes’s performance at the Union: “Clear-headedness more than human; a petrifying logicality; judicial impartiality worthy of a Rhadamanthus.” Taken from The Granta, June 4, 1904. Quoted in Robert Skidelsky, John Maynard Keynes: Hopes Betrayed 1883–1920 (London: Macmillan, 1983): 125.
13. [Mr. A. C. Pigou requests the pleasure of the company of Mr. J. M. Keynes in magnificent clothes.] Pigou to John Maynard Keynes, October 3, 1907, The Papers of John Maynard Keynes, JMK/PP/45/254.
14. Another fellow was the Scottish idealist philosopher William Ritchie Sorley, whom Pigou referenced in his early work. A. C. Pigou, “The Unity of Political and Economic Science,” Economic Journal 16, no. 63 (September 1906): 372–380.
15. Pigou to D. W. Corrie as quoted in D. W. Corrie to John Saltmarsh, February 25, 1960, Pigou Papers, KCA, ACP/1/Corrie.
16. The lines in Italian are those written above the Gates of Hell, according to Dante’s Inferno. Pigou to D. W. Corrie as quoted in D. W. Corrie to John Saltmarsh, February 25, 1960, Pigou Papers, KCA, ACP/1/Corrie.
17. Hugh Dalton, Call Back Yesterday: Memoirs 1887–1931 (London: F. Muller, 1953): 57–58.
18. Census Returns of England and Wales, 1911, Pembrokeshire, TNA, RG14/33146, 158.
19. Notes, Austin Robinson Papers, MLE, EAGR, 6/6/5, 26.
20. Ibid.
21. See Deborah Cohen, Family Secrets: Living with Shame from the Victorians to the Present Day (London: Viking, 2013), chapter 5. Aslanbeigui and Oakes assert that there is “no evidence” that Pigou had sexual encounters before World War I, but they take too strong a line in suggesting that all of Pigou’s male relationships were platonic. See Nahid Aslanbeigui and Guy Oakes, Arthur Cecil Pigou (Houndmills, Basingstoke, UK: Palgrave Macmillan, 2015): 247–252.
22. D. G. Champernowne, “Arthur Cecil Pigou 1877–1959,” Statistical Journal 122, no. 2 (1959): 264.
23. Donald Moggridge, Maynard Keynes: An Economist’s Biography (London: Routledge, 1992): 82.
24. See the introductory chapters in Michael Freeden, The New Liberalism: An Ideology of Social Reform (Oxford: Clarendon Press, 1978) and Peter Clarke, Liberals and Social Democrats (Cambridge: Cambridge University Press, 1978).
25. Freeden, The New Liberalism, 21.
26. Masterman and Pigou both spoke in “sympathy” with Greece’s struggle against Turkey in May 1897. They spoke for opposing positions on two occasions. In one, Masterman argued for the House to support Zola, while Pigou, unpopularly, demurred. In the other, Pigou supported Spain’s position early in the Spanish-American War, while Masterman and Trevelyan took the side of the Yankees. “Union Notes,” Granta 10, no. 210 (May 8, 1897): 302–303; “Union Notes,” Granta 11, no. 228 (February 12, 1898): 183–184; “Union Notes,” Granta 11, no. 234 (May 7, 1898): 278–280.
27. H. C. G. Matthew, “Masterman, Charles Frederick Gurney (1874–1927),” Oxford Dictionary of National Biography (Oxford: Oxford University Press, 2004, rev. 2011), www.oxforddnb.com/view/article/34927.
28. A. C. Pigou, “Some Aspects of the Problem of Charity,” in The Heart of the Empire: Discussions of Problems of Modern City Life in England, ed. C. F. G Masterman, rev. ed. (New York: Harper & Row, 1973): 236. Ryo Hongo suggests that this piece reveals the social inclinations behind the creation of welfare economics. Ryo Hongo, “On the Origins of Pigou’s Welfare Economics: Poor Law Reform and Unemployment Problem,” working paper, Kwansei Gakuin University, Nishinomiya, Japan, 2013, http://www.ier.hit-u.ac.jp/extra/doc/Hongo_p.pdf.
29. Pigou, “Some Aspects of the Problem of Charity,” 237, 258–259.
30. Bentley B. Gilbert, “Introduction,” in Masterman, Heart of the Empire, xi. That government was a coalition between Conservatives and a collection of “Liberal Unionists” committed to keeping Ireland. See Freeden, The New Liberalism, 139–140.
31. See Freeden, The New Liberalism; Clarke, Liberals and Social Democrats, and Avital Simhony and D. Weinstein, eds., The New Liberalism: Reconciling Liberty and Community (Cambridge: Cambridge University Press, 2001). On Marshall and new liberalism, see Eugenio F. Biagini, “New Liberalism,” in The Elgar Companion to Alfred Marshall, ed. Tiziano Raffaelli, Giacomo Becattini, Katia Caldari, and Marco Dardi (Cheltenham, UK: Edward Elgar, 2006): 554–558.
32. See A. W. Coats, “Sociological Aspects of British Economic Thought (ca. 1880–1930),” Journal of Political Economy 75, no. 5 (October 1967): 706–729; Yuichi Shionoya, “The Oxford Approach to the Philosophical Foundations of the Welfare State,” in No Wealth but Life, ed. Roger E. Backhouse and Tamotsu Nishizawa (Cambridge: Cambridge University Press, 2010): 91–113. On the antipathy between Cambridge and Hobson, see Peter Clarke, “Hobson and Keynes as Economic Heretics,” in Reappraising J.A. Hobson: Humanism and Welfare, ed. Michael Freeden (London: Unwin Hyman, 1990): 100–115.
33. Freeden, The New Liberalism, 15.
34. Alfred Marshall, Principles of Economics, 1.
35. “Lectures Proposed by the Special Board for Economics and Politics, 1904–1905,” Cambridge University Reporter 45, no. 2 (October 8, 1904): 21.
36. A. C. Pigou, “A Point of Theory Connected with the Corn Tax,” Economic Journal 12, no. 47 (September 1902): 415–420; A. C. Pigou, “Pure Theory and the Fiscal Controversy,” Economic Journal 14, no. 53 (March 1904): 29–33; A. C. Pigou, “Some Remarks on Utility,” Economic Journal 13, no. 49 (March 1903): 58–68; A. C. Pigou, “Monopoly and Consumers’ Surplus,” Economic Journal 14, no. 55 (September 1904): 388–394.
37. See David Collard, “Introduction,” in A.C. Pigou, Journal Articles 1902–1922, ed. David Collard (London: Macmillan, 2002): xiv–xvii.
38. A. C. Pigou, “A Parallel Between Economic and Political Theory,” Economic Journal 12, no. 46 (June 1902): 276.
39. Ibid.
40. Ibid., 277.
41. On free trade and liberalism, see Anthony Howe, Free Trade and Liberal England, 1846–1946 (Oxford: Clarendon Press, 1997); on free trade as a political movement, see Frank Trentmann, Free Trade Nation: Commerce, Consumption, and Civil Society in Modern Britain (Oxford: Oxford University Press, 2008).
42. Trentmann, Free Trade Nation, 69–80.
43. Tariff reform had many implications (for social reform, for Empire, and for Ireland), and it split British political constituencies in a number of ways. See Alan Sykes, Tariff Reform in British Politics 1903–1913 (Oxford: Clarendon Press, 1979).
44. See “Hands Off the People’s Food,” the first chapter in Peter Clarke, Hope and Glory, rev. ed. (London: Penguin, 2004). See also Peter T. Marsh, Joseph Chamberlain: Entrepreneur in Politics (New Haven, CT: Yale University Press, 1994), chapter 19.
45. A. C. Pigou, “Professors and the Corn Tax,” Speaker (June 14, 1902): 306. This was consistent with Marshall’s own less explicit “rule” against “taking active part in the discussions in the market place.” Marshall to W. A. S. Hewins, July 14, 1903, quoted in A. W. Coats, “The Appointment of Pigou as Marshall’s Successor: Comment,” Journal of Law and Economics 15, no. 2 (October 1972): 487 n.1.
46. Pigou, “A Point of Theory Connected with the Corn Tax.” See the preface to Pigou’s Protective and Preferential Import Duties (London: Macmillan, 1906), in which Pigou referenced several articles that he wrote for popular magazines.
47. A. C. Pigou, “Free Trade and Its Critics” Fortnightly Review 435 (March 1, 1903): 542–554.
48. Ibid., 542–543.
49. Ibid.
50. F. Barnstable, A. L. Bowley, Edwin Cannan, Leonard Courtney, F. Y. Edgeworth, C. K. Gonner, Alfred Marshall, et al., “Professors of Economics and the Tariff Question,” Times (August 15, 1903): 4. See Nahid Aslanbeigui and Guy Oakes, “The British Tariff Reform Controversy and the Genesis of Pigou’s Wealth and Welfare, 1903–12” History of Political Economy 47, annual supplement (2015): 23–48.
51. On Foxwell and Cunningham at Cambridge, see Gerard M. Koot, English Historical Economics, 1870–1926: The Rise of Economic History and Neomercantilism (Cambridge: Cambridge University Press, 1987), chapters 6 and 7.
52. A. C. Pigou, The Riddle of the Tariff (London: R. Brimley Johnson, 1903): v–vi.
53. A. C. Pigou, “Professors of Economics on Fiscal Policy,” Times (August 24, 1903): 4; A. C. Pigou, “The Economics of Mr. Balfour’s Manifesto,” Times (September 18, 1903): 6; A. C. Pigou, “Consumers and Producers,” Times (November 10, 1903): 15; A .C. Pigou, “Consumers and Producers,” Times (November 14, 1903): 14; A. C. Pigou, “To the Editor of the Times,” Times (December 3, 1903): 5.
54. Edwin Cannan, “Letter to the Times,” Times (November 28, 1903): 14, quoted in A. W. Coats, “Political Economy and the Tariff Reform Campaign of 1903,” Journal of Law and Economics 11 (1968): 213.
55. A. C. Pigou, “The Known and the Unknown in Mr. Chamberlain’s Policy,” Fortnightly Review 445 (January 1, 1904): 46–47.
56. Ibid., 47.
57. The motion carried by 255 votes to 195. Alon Kadish, Historians, Economists, and Economic History (London: Routledge, 1989): 217.
58. Ibid. Pigou also wrote a note on the usefulness of economic theory for resolving practical disputes over free trade. Pigou, “Pure Theory and the Fiscal Controversy.”
59. A. C. Pigou, “Free Trade and the Empire by William Graham,” Economic Journal 14, no. 54 (June 1904): 268.
60. A. C. Pigou, “Mr. Chamberlain’s Proposals,” Edinburgh Review 200, no. 310 (July–October 1904): 449–475. A. C. Pigou, “Protection and the Working Classes,” Edinburgh Review 203, no. 415 (January–April 1906): 1–32.
61. “Cambridge University Free Trade Association Agenda for the Annual Meeting,” 1906, Browning Papers, KCA, OB/1/1281/A.
62. Pigou to Macmillan, April 10, 1908, Macmillan Papers, British Library, London, United Kingdom (hereafter BL), Add. MSS 55199, 20.
63. Pigou to Macmillan, August 25, 1906, Macmillan Papers, BL, Add. MSS 55199, 12–13.
64. Pigou, Protective and Preferential Import Duties, 2–3.
65. Ibid., 80.
66. Pigou, “The Unity of Political and Economic Science,” 378.
67. This was Pigou’s first book with Macmillan, which published the overwhelming majority of his subsequent books. Fifty years later, Pigou wrote that Macmillan “have been quite good with me, though some people think them uninspiring.” Pigou to Philip Noel-Baker, n.d. [January–February 1955], The Papers of Baron Noel-Baker, Churchill Archive Centre, Cambridge, UK (hereafter CAC), NBKR 9/69.
68. Pigou to Macmillan, November 19, 1904, Macmillan Papers, BL, Add. MSS 55199, 1–2.
69. “Schedule of the Jevons Memorial Lectures: Associations of Employers & Employed, Arbitration and Conciliation,” The Papers of James Bonar, MLE, Bonar 3/35.
70. A. C. Pigou Principles and Methods of Industrial Peace (London: Macmillan, 1905): vii.
71. Pigou, Industrial Peace, 3–4; Pigou to Macmillan, November 19, 1904, Macmillan Papers, BL, Add. MSS 55199, 1–2.
72. Pigou, Industrial Peace, 22–28.
73. Ibid., 92–103.
74. Ibid., 161–162.
75. Ibid., 207–208. Though automatic arbitration would “involve too large an interference with individual liberties,” selective arbitration was desirable.
76. The course met Saturday mornings to supplement Marshall’s advanced economic theory course. Peter Groenewegen, A Soaring Eagle: Alfred Marshall 1842–1924 (Aldershot, UK: Edward Elgar, 1995), 551–552.
77. A. C. Pigou, “Memorandum on Some Economic Aspects and Effects of Poor Law Relief,” in Minutes and Evidence of the Royal Commission on the Poor Laws and Relief of Distress, Appendix vol. 9, 1910 [Cd. 5068]: 981–1000. For general background on the Commssion, see David Englander, Poverty and Poor Law Reform in Nineteenth-Century Britain, 1834–1914 (London: Addison Wesley Longman, 1998): 73–78. See also Clarke, Liberals and Social Democrats, 118–121; José Harris, William Beveridge: A Biography (Oxford: Clarendon Press, 1977), chapter 6; Aslanbeigui and Oakes, Arthur Cecil Pigou, 57.
78. Minutes and Evidence of the Royal Commission on the Poor Laws and Relief of Distress, [Cd. 5068], 982.
79. Pigou to Oscar Browning, n.d. [1906–7], Browning Papers, KCA, OB/1/1281/A. The Commission produced two reports. The majority report stressed the importance of individual responsibility. The minority report argued for greater state involvement. Hongo argues that Pigou’s contribution, together with his other early work on social issues—especially unemployment—was foundational for the development of his welfare economics. Hongo, “On the Origins of Pigou’s Welfare Economics.” In contrast, John Maloney observes, “the battle to professionalise economics was primarily a battle between those who saw it as a discipline comparable to the natural sciences and those who saw it as an adjunct to immediate social reform,” and Pigou was a professionalizer, not a reformer. John Maloney, The Professionalization of Economics: Alfred Marshall and Dominance of Orthodoxy (New Brunswick, NJ: Transaction, 1991), 232. See also Harris, William Beveridge, chapters 5 and 6. The binary distinction between minority and majority reports is challenged in A. W. Vincent, “The Poor Law Reports of 1909 and the Social Theory of the Charity Organization Society,” Victorian Studies 27, no. 3 (Spring 1984): 343–363.
80. See Freeden, The New Liberalism; Clarke, Liberals and Social Democrats; Bruce K. Murray, The People’s Budget 1909/10: Lloyd George and Liberal Politics (Oxford: Clarendon Press, 1980). On the international context, see Daniel T. Rodgers, Atlantic Crossings: Social Politics in a Progressive Age (Cambridge, MA: Harvard University Press, 1998); James T. Kloppenberg, Uncertain Victory: Social Democracy and Progressivism in European and American Thought, 1870–1920 (New York: Oxford University Press, 1986).
81. G. E. Moore, Principia Ethica, rev. ed. (Cambridge: Cambridge University Press, 1993).
82. Ibid., 238–251; Skidelsky, John Maynard Keynes: Hopes Betrayed, 133–141; Yuichi Shionoya, “Sidgwick, Moore and Keynes: A Philosophical Analysis of Keynes’s ‘My Early Beliefs’” in Keynes and Philosophy, ed. Bardley Bateman and John Davis (Northampton, MA: Edward Elgar, 1991): 6–29; Roger E. Backhouse, “Sidgwick, Marshall, and the Cambridge School of Economics,” History of Political Economy 38, no. 1 (Spring 2006): 15–44.
83. Skidelsky, John Maynard Keynes: Hopes Betrayed, 140. J. M. Keynes wrote that Moore’s “influence was not only overwhelming; it was exciting, exhilarating, the beginning of a new renaissance, the opening of a new heaven on a new earth.”
84. Bart Schultz argues that Moore’s departure from Sidgwick was less dramatic than is often understood. Bart Schultz, Henry Sidgwick: Eye of the Universe: An Intellectual Biography (Cambridge: Cambridge University Press, 2004): 5–6, 160–163.
85. A. C. Pigou, “The Ethics of Nietzsche,” in The Problem of Theism and Other Essays by A. C. Pigou (London: Macmillan, 1908): 124. This excerpt is taken from a section in which Pigou dismissed what Derek Parfit later called the “Repugnant Conclusion,” the idea that society would be best off maximizing the number of people in the world, even if each person was trivially happy. Derek Parfit, Reasons and Persons (Oxford: Clarendon, 1984), chapter 16. Pigou noted: “its inadequacy, I think, is obvious. Mere quantity of life does not present itself to our consciousness as the only good thing; it may not even present itself as necessarily good at all.”
86. Dalton, Call Back Yesterday, 54.
87. Pigou to J. M. Keynes, n.d. [1913?], Keynes Papers, KCA, JMK/PP/45/254.
88. See W. J. Mandler, British Idealism: A History (Oxford: Oxford University Press, 2011).
89. Pigou, “The Unity of Political and Economic Science,” 372.
90. A. C. Pigou, “The Problem of Good,” in The Problem of Theism and Other Essays, 85. The essay was originally published in 1907 in the International Journal of Ethics as “Some Points of Ethical Controversy.”
91. Pigou asked Keynes (then at the India Office), “if not obscured by Indian bollocks” to comment on whether people had already addressed “the notion of the goodness of a . . . state as a function of many of variables.” Pigou to J. M. Keynes, n.d. [1913?], Keynes Papers, KCA, JMK/PP/45/254/18.
92. Pigou, “The Problem of Good,” 87.
93. Ibid., 88.
94. Henry Sidgwick, The Methods of Ethics (London: Macmillan, 1907), 489–490.
95. A. C. Pigou, “The Problem of Good,” 88.
96. Pigou tempered this claim as he did for “pleasure,” noting that love “certainly adds to this goodness if the object, as conceived in consciousness, both is and is thought to be worthy.” Ibid., 88–89.
97. A. C. Pigou, “The Ethics of the Gospels” in The Problem of Theism and Other Essays, 99.
98. Pigou, “The Ethics of the Gospels,” 96, 100.
99. Ibid., 108. Pigou was quoting Sidgwick’s 1866 review of Nietzsche’s Ecce Homo in the Westminster Review.
100. J. M. Keynes to B. W. Swithinbank, March 27, 1906, quoted in R. F. Harrod, The Life of John Maynard Keynes (New York: Harcourt Brace, 1951): 116. Sidgwick resigned his Trinity fellowship over adherence to Anglicanism. On Sidgwick and religion, see Jerome Schneewind, Sidgwick’s Ethics and Victorian Moral Philosophy (Oxford: Oxford University Press, 1977): 17–20, 26–39. See also Steven G. Medema, “‘Losing My Religion’: Sidgwick, Theism, and the Struggle for Utilitarian Ethics in Economic Analysis,” History of Political Economy 40, no. 5 (2008): 189–211; and Schultz, Henry Sidgwick: Eye of the Universe, chapter 2.
101. Pigou’s work on Robert Browning and his essay on the gospels show respect for religion. However, in another early essay, he identified theism as a major problem. A. C. Pigou, “The Problem of Theism” in The Problem of Theism and Other Essays, 18–64. He discussed religion with the vicar in Buttermere, the Lake District town where he summered, and had Macmillan send the vicar a copy of “The Problem of Theism.” Pigou to Macmillan, March 18, 1929, Macmillan Papers, BL, Add. MSS 55199 [140]. In his late years, he joked about joining the church:
I have been contemplating this final paragraph in my obituary notice: “But the Professor! . . . in his 71st year, he accepted a stop-gap appointment to the deanship of King’s College. . . . When the college council promptly met to make a permanent appointment, the whole college assembled in the court, chanting in unison: ‘Pigou, Pigou, we want Pigou!’ . . . [Since] by tradition the dean should be a clergyman . . . [the] Professor [was asked] whether he would consider taking holy orders. ‘Salus populi suprema lex’ was the instant answer. In a few days he had passed his bishop’s examination with flying colours.”
Pigou to L. P. Wilkinson, n.d. [after 1948], The Papers of Lancelot Patrick Wilkinson, KCA, LPW/8/4/7.
102. See part I, chapter IV of A. C. Pigou, Wealth and Welfare (London: Mac-millan, 1912): 52–65; part I, chapter X of A. C. Pigou, The Economics of Welfare, fourth ed. (London: Macmillan, 1932): 106–122. Although Marshall did not discuss eugenics, he was influenced by biological and evolutionary thinking. See, for instance, Tiziano Raffaelli, Marshall’s Evolutionary Economics (London: Routledge, 2003) and Tiziano Raffaelli, Giacomo Becattini, Katia Caldari, and Marco Dardi, eds., The Elgar Companion to Alfred Marshall, (Cheltenham, UK: Edward Elgar, 2006), particularly chapter 28 of that volume by Geoffrey M. Hodgson, “Economics and Biology.”
103. A. C. Pigou, “Social Improvement in the Light of Modern Biology,” Economic Journal 17, no 67 (September 1907): 359.
104. See R. H. Lock, Recent Progress in the Study of Variation, Heredity, and Evolution (London: John Murray, 1907); R. C. Punnett, Mendelism (London: Macmillan and Bowes, 1905). On eugenics, see Lucy Bland and Lesley A. Hall, “Eugenics in Britain,” in The Oxford Handbook of the History of Eugenics, edited by Alison Bashford and Philippa Levine (Oxford: Oxford University Press, 2010): 213–227. See also Andre Pichot, The Pure Society: From Darwin to Hitler (London: Verso, 2001): 109–173.
105. Pigou, “Social Improvement in the Light of Modern Biology,” 361.
106. Pigou, Wealth and Welfare, 58–59. In The Economics of Welfare, he added: “For, whereas each new man must begin where his last ancestor began, each new invention begins where its last ancestor left off.” Pigou, The Economics of Welfare, 114. See also David Collard, “Pigou and Future Generations,” Cambridge Journal of Economics 20 (1996): 585–597.
107. Eugenic elements in economic theory indicated a conception of a heterogeneous population. See Sandra J. Peart and David M. Levy, “Denying Human Homogeneity: Eugenics & The Making of Post-Classical Economics,” Journal of the History of Economic Thought 25, no. 3 (September 2003): 261–288. See also Thomas C. Leonard, Illiberal Reformers: Race, Eugenics and American Economics in the Progressive Era (Princeton, NJ: Princeton University Press, 2016), especially chapter 7.
108. Pigou, “Social Improvement in the Light of Modern Biology,” 365.
109. Pigou’s treatment of eugenics changed in his later work, as he discussed genetic traits principally in terms of their effect on economic productivity and thus economic welfare. However, Pigou still treated biological quality as more than just a means to an economic end. He asserted not only that “ability, moral character, good health, physical strength and grace, beauty and charm” were “desirable qualities,” but also that they were determined at least in part by hereditary factors. Pigou, Wealth and Welfare, 53. This marked a departure from his earlier work. In Principles and Methods of Industrial Peace, Pigou’s valuation of fitness was instrumental and not solely inherited. He stressed the importance of biological fitness for the quality of labor as a technical input. “With increased nourishment, leisure, and so forth,” Pigou wrote, “the work done may gradually become a different commodity. . . . In short, the biological law of functional adaptation supervenes upon the mechanical laws of equilibration.” Pigou, Industrial Peace, 47.
110. Ibid., 4.
111. Copy of the Gownsman, May 26, 1910, Austin Robinson Papers, MLE, EAGR 6/6/4. Aslanbeigui and Oakes argue that 1906, rather than 1908, marked the turning point in Pigou’s extra-academic involvement. Pigou did comment less on politics after 1906, but this is attributable to the decisiveness of the Liberal victory in that year rather than to any change of heart on Pigou’s part. Aslanbeigui and Oakes, Arthur Cecil Pigou, 58. See also Aslanbeigui and Oakes, The British Tariff Reform Controversy,” 45.
112. A. C. Pigou, Economic Science in Relation to Practice (London: Macmillan, 1908): 8.
113. On Marshall and Foxwell’s friendship, see Groenewegen, A Soaring Eagle, 670–679.
114. On Foxwell and the historical school, see Gerard M. Koot, “H.S. Foxwell and English Historical Economics,” Journal of Economic Issues 11, no.3 (September 1977): 561–586.
115. Donald Winch Wealth and Life: Essays on the Intellectual History of Political Economy in Britain, 1848–1914 (Cambridge: Cambridge University Press, 2009): 260–263.
116. See Coats, “Political Economy and the Tariff Reform Campaign,” 226–228; Coats, “The Appointment of Pigou as Marshall’s Successor,” 487–495. See also Winch, Wealth and Life, 263.
117. R. H. Coase, “The Appointment of Pigou as Marshall’s Successor,” Journal of Law and Economics 15, no. 2 (October 1, 1972): 473–485. Groenewegen argues that Marshall decided to name Pigou as his successor sometime in 1905–1906. Groene-wegen, A Soaring Eagle, 625.
118. Coase, “The Appointment of Pigou,” 476.
119. H. S. Foxwell to J. N. Keynes, October 6, 1900, in The Correspondence of Alfred Marshall, II, 289 n.7.
120. H. S. Foxwell to J. Bonar, November 22, 1903, quoted in Winch, Wealth and Life, 265.
121. Coase, “The Appointment of Pigou,” 477–479; See also Aslanbeigui and Oakes, Arthur Cecil Pigou, 23–24.
122. Trevor W. Jones, “The Appointment of Pigou as Marshall’s Successor: The Other Side of the Coin,” Journal of Law and Economics 21, no. 1 (April 1978): 235–243.
123. John Neville Keynes, Diaries, April 30, 1908, cited in Jones, “The Appointment of Pigou as Marshall’s Successor,” 240.
124. Pigou’s electors were the Vice Chancellor, Ernest Stewart Roberts, Lord Courtney, J. N. Keynes, Inglis Palgrave, F. Y. Edgeworth, J. S. Nicholson, Vincent Henry Stanton, William Ritchie Sorley, and Arthur Balfour. There are no surviving records of how the electors voted, and the election has been the subject of speculation. Balfour did not attend the proceedings, citing Pigou’s participation in the free trade debates. See Coats, “Politial Economy and the Tariff Reform Campaign,” 226–229. Balfour may have supported Pigou, as Walter Layton (1884–1966) suggested, though this is unlikely. The letter in which he expressed his opinion to the Vice Chancellor has been lost. See W. T. Layton, Dorothy: The Story of the Married Life of Dorothy and Walter Layton (London: Collins, 1961): 32–33; A. W. Coats to Austin Robinson, January 18, 1968, Austin Robinson Papers, MLE, EAGR 6/6/6, 19. See also Coase, “The Appointment of Pigou,” 478. Courtney was an active free trader and likely voted for Pigou, and Edgeworth was public about his support of Marshall’s protégé. Sorley also likely supported his fellow Kingsman, and Foxwell believed Stanton also voted for Pigou. Coase, “The Appointment of Pigou as Marshall’s Successor,” 493–494. On the other side were Nicholson, Palgrave, and J. N. Keynes, who found the process “like a black cloud throwing its shadow over the whole of the term.” Diary of Keynes, June 14, 1908, quoted from Coase, “The Appointment of Pigou,” 480.
125. Alfred Marshall to H. S. Foxwell, May 31, 1908, in The Correspondence of Alfred Marshall, III, 190.
126. Pigou to R. F. Harrod, n.d. [1949], The Papers of Sir R. F. Harrod, BL, Add MS 72764, 235.
127. Pigou to Macmillan, June 5, 1908, Macmillan Papers, BL, Add. MSS 55199, 22.
128. Pigou, The Problem of Theism, vii.
129. Pigou to Macmillan, June 5, 1908, Macmillan Papers, BL, Add. MSS 55199, 22.
130. Ibid.
131. Coase, “Pigou as Marshall’s Successor,” 477. Quoting Letter from Marshall to H. S. Foxwell, February 7, 1906, The Correspondence of Alfred Marshall, III, 48.
132. Groenewegen, A Soaring Eagle, 761.
133. Letter from H. S. Foxwell to C. E. Collet, June 8, 1908, quoted in Coats, “Pigou as Marshall’s Successor,” 494.
Chapter 3: Bearing Fruit as Well as Light
1. At the time, the editor was J. M. Keynes. Edgeworth gave up his duties in 1911 but returned as a joint editor in 1919.
2. F. Y. Edgeworth, “Wealth and Welfare by A.C. Pigou,” Economic Journal 23, no. 89 (March 1913): 62, 63, 67.
3. Marshall, though pleased with Pigou’s work, took issue with the abstract treatment of increasing and decreasing returns. He recorded his critiques of Pigou’s work in his own copy of Wealth of Welfare. See Krishna Bharadwaj, “Marshall on Pigou’s Wealth and Welfare,” Economica New Series 39, no. 153 (February 1973): 32–46.
4. Allyn Young, “Pigou’s Wealth and Welfare,” Quarterly Journal of Economics 27, no. 4 (August 1913): 672.
5. Sir John Macdonell, “New Phases of Political Economy.” Times Literary Supplement (January 9, 1913): 10.
6. Edgeworth, “Wealth and Welfare by A.C. Pigou,” 62.
7. A. C. Pigou, Economics of Welfare, first ed. (London: Macmillan, 1920): 5.
8. Ibid. On engineering and economics, see Mary Morgan, “Economics,” in The Cambridge History of Science Volume 7: The Modern Social Sciences, ed. Theodore M. Porter and Dorothy Ross (Cambridge: Cambridge University Press, 2003): 275–305.
9. Ibid.
10. Peter Groenewegen, A Soaring Eagle: Alfred Marshall 1842–1924 (Aldershot, UK: Edward Elgar, 1995): 553; See Robert Skidelsky, John Maynard Keynes: Hopes Betrayed 1883–1920 (London: Macmillan, 1983): 209. The group consisted of Pigou, Leonard Alston, John Clapham, Lowes Dickinson, C. R. Fay, W. E. Johnson, John Maynard Keynes, Walter Layton, and H. O. Meredith. Dickinson was an economist only by the loosest definition, and Johnson’s credentials were also shaky. Fay and Clapham were economic historians.
11. A. C. Pigou, “Obituary [John Neville Keynes],” Economic Journal 60, no. 238 (June 1950): 408. He would continue to teach the general lecture course until 1930. “Lectures Proposed by the Special Board for Economics and Politics, 1910–11,” Cambridge University Reporter 41 no. 3 (October 8, 1908): 55.
12. Groenewegen, A Soaring Eagle, 553. “Lectures Proposed by the Special Board for Economics and Politics, 1908–9,” Cambridge University Reporter 39, no. 3 (October 10, 1908).
13. Skidelsky, John Maynard Keynes: Hopes Betrayed, 211.
14. This distinction, as Pigou pointed out, came from Ricardo. A. C. Pigou, The Policy of Land Taxation (London: Longmans, Green, and Co., 1909): 10. The article was A. C. Pigou, “Local Taxation,” Edinburgh Review 206 (July, 1907): 88–109. On the economics of land taxation, see Nahid Aslanbeigui and Guy Oakes, Arthur Cecil Pigou (Houndmills, Basingstoke, UK: Palgrave Macmillan, 2015), 105–107.
15. Pigou, The Policy of Land Taxation, 29.
16. See Avner Offer, Property and Politics 1870–1914: Landownership, Law, Ideology and Urban Development in England (Cambridge: Cambridge University Press, 1981), chapter 22; Bruce K. Murray, The People’s Budget 1909/10: Lloyd George and Liberal Politics (Oxford: Clarendon Press, 1980): 44–50, 131–147, 296–300; Roy Hattersley, David Lloyd George: The Great Outsider (London: Little, Brown, 2010), especially chapters 15 and 22.
17. Pigou, The Policy of Land Taxation, 32. Pigou advocated for heavily taxing appreciation in the value of land due to changes in the market. Pigou also argued for the superiority of taxing the public value of land rather than the capital value of land as Lloyd George proposed. See Murray, The People’s Budget, 133–135.
18. Ibid.
19. Pigou reviewed five Italian books between 1907 and 1913. See A. C. Pigou, “Emigrazione di Uomini ed Esportazione di Merci by L. Fontana-Russo,” Economic Journal 17, no. 65 (March 1907): 114; A. C. Pigou, “Commercio Internazionale by G. de Francisi Gerbino,” Economic Journal 17, no. 66 (June 1907): 262–263; A. C. Pigou; “Trattato di Politica Commerciale by Luigi Fontana-Russo,” Economic Journal 17, no. 67 (September 1907): 414–415; A. C. Pigou, “L’Imposta sul Trasporto Degli Emigranti by Pasquale Jannaconne,” Economic Journal 18, no. 69 (March 1908): 95; A. C. Pigou, “Intorno al Concetto di Reddito Imponibile e di un Sistema d’Imposte sul Readdito Consumato by Luigi Einaudi,” Economic Journal 23, no. 90 (June 1913): 260–263.
20. A. C. Pigou, “Equilibrium Under Bilateral Monopoly,” Economics Journal 18, no. 70 (June 1908): 205–220; A. C. Pigou, “A Method of Determining the Numerical Values of Elasticities of Demand,” Economics Journal 20, no. 80 (December 1910): 636–640; A. C. Pigou, “Producers’ and Consumers’ Surplus,” Economic Journal 20, no. 79 (September 1910): 358–370.
21. Angus Deaton, “The Measurement of Income and Price Elasticities,” European Economic Review 7 (1975): 261–274, quoted in David Collard, “Introduction,” in A.C. Pigou, Journal Articles 1902–1922, ed. David Collard (London: Macmillan, 2002): xvi. See also Milton Friedman, “Professor Pigou’s Method for Measuring Elasticities of Demand from Budgetary Data,” Quarterly Journal of Economics 50, no. 1 (November 1935): 151–163; A. C. Pigou, Milton Friedman, and N. Georgescu-Roegen, “Marginal Utility of Money and Elasticities of Demand,” Quarterly Journal of Economics 50, no. 3 (May 1936): 532–539. Pigou would also correspond briefly with the econometrician Jacob Marschak (1898–1977) in the mid-1930s about this topic. See Arthur Cecil Pigou Papers, MLE, Pigou 2/2/4 and Pigou 2/2/7.
22. It expanded on topics that Pigou had explored in 1903. See A. C. Pigou, “Some Remarks on Utility,” Economic Journal 13, no. 49 (March 1903): 58–68. Alfred Marshall, Principles of Economics, eighth ed. (London: Palgrave Macmillan, 2013): 103–110; or, in the edition Pigou would have used, Alfred Marshall, Principles of Economics, fourth ed. (London: Macmillan, 1898): 199–208.
23. Marshall’s ethics were not entirely utilitarian, though he drew on utilitarian ideas. By the 1870s, Marshall’s ethics involved a synthesis of various systems, notably Darwinian evolutionary ethics. See Tiziano Raffaelli, Marshall’s Evolutionary Economics (London: Routledge, 2003): 96–102.
24. Marshall, Principles of Economics, fourth ed., 532–533. This analysis was reproduced largely unchanged in the definitive eighth edition. See Marshall, Principles of Economics, eighth ed., book V, chapter XII, 462–476. Peter Groenewegen, “Marshall on Welfare Economics and the Welfare State,” in No Wealth but Life, ed. Roger E. Backhouse and Tamotsu Nishizawa (Cambridge: Cambridge University Press, 2010), 30–31.
25. Pigou wrote on the divergence of private and public supply and demand schedules. See Nahid Aslanbeigui, “The Cost Controversy: Pigovian Economics in Disequilibrium,” European Journal of the History of Economic Thought 3, no. 2 (Summer 1996): 275–295.
26. A. C. Pigou, “Some Remarks on Utility,” Economic Journal 13, no. 49 (March 1903): 60.
27. Pigou, “Producers’ and Consumers’ Surplus,” 360.
28. This change in price would not be considered a negative externality today. Pigou changed his mind about what constituted an external diseconomy in the 1920s, as will be discussed in chapter 5.
29. Ibid., 365. Marshall suggested in Principles of Economics that external economies could be related to increasing returns to scale in an industry (and thus could push markets away from the theoretical ideal), but his discussion was not as explicit as Pigou’s. See Marshall, Principles of Economics, fourth ed., 393–397.
30. The term ophelimity came from Italian economist Vilfredo Pareto, who associated optimizing ophelimity with a pure form of bargaining and exchange. Ibid., 359. See also Michael McLure, “Pareto and Pigou on Ophelimity, Utility, and Welfare: Implications for Public Finance,” Discussion Paper 09.13 (Perth: Business School, University of Western Australia, 2009).
31. Pigou, “Producers’ and Consumers’ Surplus,” 366.
32. Marshall disputed some of Pigou’s assertions. See Bharadwaj, “Marshall on Pigou’s Wealth and Welfare,” 41–43.
33. Skidelsky, John Maynard Keynes: Hopes Betrayed, 211.
34. Ibid.
35. D. W. Corrie to John Saltmarsh, February 19, 1960, Papers Relating to Arthur Cecil Pigou, KCA, ACP/1/Corrie.
36. The architect was A. M. Moberley, who signed the menu card for the dinner celebrating Pigou’s professorship. See “Menu Card,” June 6, 1908, Academic and Tutorial Records, KCA, KCAC/1/2/6/1/Pigou1. See also Plans for Lower Gatesgarth, 1911, Cumbria Archive Centre, Carlisle, United Kingdom, SRDC/3/2/709.
37. Pigou to Macmillan, February 10, 1912, Macmillan Papers, BL Add. MSS 55199, 30.
38. Pigou to Macmillan, July 11, 1912, Macmillan Papers, BL, Add. MSS 55199, 44.
39. Pigou to Macmillan, November 7, 1915, Macmillan Papers, BL, Add. MSS 55199, 47.
40. In general, citations to Pigou’s works on welfare reference the latest edition then published. In this chapter, which concerns Wealth and Welfare and the first edition of The Economics of Welfare, an effort has been made in the footnotes to register if an idea or phrase was not original to one of these books. Here, a general overview of the evolution of The Economics of Welfare may be helpful. The first edition of the book, which ran over a thousand pages, was criticized for its length. Therefore, as will be explained below, in subsequent editions, Pigou removed the book’s final section, dealing with fluctuations in national income, to an independent volume, Industrial Fluctuations. He also condensed a three-sided distinction between individual, social, and trade net product into a “single distinction between social and private net product;” see A. C. Pigou, The Economics of Welfare, second ed. (London: Macmillan, 1924): vi. As treated below, the third edition (1929) was edited so as to respond to the so-called cost controversy, notably Piero Sraffa’s critique of the Marshallian theory of value. The fourth edition contained only minor revisions. See Nahid Aslanbeigui, “Introduction,” in The Economics of Welfare, by A. C. Pigou (New Brunswick, NJ: Transaction, 2001): xxxiv.
41. A. C. Pigou, Wealth and Welfare (London: Macmillan, 1912): 3.
42. Ibid. The term “measuring rod of money” was originally Marshall’s.
43. Pigou, The Economics of Welfare, first ed., 5. The language of positive science did not appear in Wealth and Welfare.
44. Pigou to Macmillan, September 9, 1923, Macmillan Papers, BL, Add. MSS 55199, 78.
45. On the economic implications of utilitarianism, see Steven G. Medema, The Hesitant Hand: Taming Self Interest in the History of Economic Ideas (Princeton, NJ: Princeton University Press, 2009), chapter 2.
46. Pigou himself has been cast as a utilitarian. See C. J. Dewey, “‘Cambridge Idealism’: Utilitarian Revisionists in Late Nineteenth-Century Cambridge,” Historical Journal 17, no. 1 (March 1, 1974): 63–78; Roger E. Backhouse, “Sidgwick, Marshall, and the Cambridge School of Economics,” History of Political Economy 38, no. 1 (Spring 2006): 15–44, 35–38; Margaret G. O’Donnell, “Pigou: An Extension of Sidgwickian Thought,” History of Political Economy 11, no. 4 (1979): 588.
47. Pigou, Wealth and Welfare, 3.
48. Pigou, The Economics of Welfare, first ed., 11.
49. Ibid.
50. Pigou, Wealth and Welfare, 362–363 and Pigou, The Economics of Welfare, first ed., 785. In an exam Pigou prepared for Cambridge undergraduates in 1910 or 1911, he asked students to examine “how . . . provision [should] be made for . . . [good will] in the balance sheet.” Gerald Shove, Class Notes, c. 1909–10, Gerald Frank Shove Papers, MLE, Shove 1/1 [9–10].
51. Backhouse, “Sidgwick, Marshall, and the Cambridge School of Economics;” Martin Daunton, “Welfare, Taxation and Social Justice: Reflections on Cambridge Economists from Marshall to Keynes,” in No Wealth but Life, ed. Backhouse and Nishizawa, 62–90. See also C. J. Dewey, “Cambridge Idealism;” Medema, The Hesitant Hand, 42–50.
52. Backhouse, “Sidgwick, Marshall, and the Cambridge School of Economics,” 22; Roger E. Backhouse and Tamotsu Nishizawa, “Introduction: Towards a Reinterpretation of the History of Welfare Economics” in No Wealth but Life, ed. Backhouse and Nishizawa, 2.
53. In Sidgwick’s words, “when the supply of any article has been increased and its price consequently fallen, it is not really correct to reckon the total utility of the article as having increased in proportion to the decrease in value.” Henry Sidgwick, The Principles of Political Economy (London: Macmillan, 1883): 75.
54. Mill wrote, “it was the proper office of government to build and maintain lighthouses, establish buoys, &c., for the security of navigation: for since it is impossible that the ships at sea which are benefited by a lighthouse, should be made to pay a toll on the occasion of its use, no one would build lighthouses from motives of personal interest, unless indemnified and rewarded from a compulsory levy made by the state.” John Stuart Mill, Principles of Political Economy: With Some of Their Applications to Social Philosophy (London: Longmans, Green, Reader, and Dyer, 1866): 589. Ronald Coase challenged this position in 1974, noting that lighthouses in Britain were traditionally maintained by the private sector. See R. H. Coase, “The Lighthouse in Economics,” Journal of Law and Economics 17, no. 2 (October 1974): 357–376. For a more full discussion, see Medema, The Hesitant Hand, 33–42.
55. See Daunton, “Welfare, Taxation and Social Justice,” 66. This utilitarian assumption was disputed by several economic thinkers of the late nineteenth century, notably Vilfredo Pareto, who questioned the possibility of interpersonal comparisons of utility. See Vilfredo Pareto, Manual of Political Economy (Oxford: Oxford University Press, 2014), particularly chapters 3 and 6.
56. Sidgwick, Principles of Political Economy, 511.
57. Backhouse, “Sidgwick, Marshall, and the Cambridge School of Economics,” 27. On Sidgwick’s Victorian values, see Jerome Schneewind, Sidgwick’s Ethics and Victorian Moral Philosophy (Oxford: Oxford University Press, 1977). On Sidgwick’s tentative support for government intervention, see Medema, The Hesitant Hand, 49.
58. Backhouse, “Sidgwick, Marshall, and the Cambridge School of Economics,” 26–27.
59. Ibid., and Daunton, “Welfare, Taxation and Social Justice,” 67.
60. Groenewegen A Soaring Eagle, 275.
61. Marshall praised the third chapter of Principles of Political Economy on the functions of government as “by common consent, far the best thing of its kind in any language.” “Report of Marshall’s Speech at the Meeting to Promote A Memorial For Henry Sidgwick,” November 22, 1900, in The Correspondence of Alfred Marshall, II, 442. On Sidgwick’s designation of economics as an art, see Sidgwick, Principles of Political Economy, 27.
62. Marshall, Principles of Economics, eighth ed., 713–714. See also Backhouse, “Sidgwick, Marshall, and the Cambridge School of Economics,” 28–33; Groenewegen, “Marshall on Welfare Economics and the Welfare State,” 25–41.
63. See Daunton, “Welfare, Taxation and Social Justice,” 68. Medema suggests that both Sidgwick and Marshall evinced dim views of government effectiveness. Sidgwick noted the potential for waste; Marshall was especially worried about corruption. Medema, The Hesitant Hand, 49, 57; Roger E. Backhouse and Steven G. Medema, “Economists and the Analysis of Government Failure: Fallacies in the Chicago and Virginia Interpretations of Cambridge Welfare Economics,” Cambridge Journal of Economics 36 no. 4 (July 2012): 981–994.
64. Because there was “no precise line between economic and non-economic satisfactions,” Pigou saw money as a viable proxy for utility, which itself was just one of many variables in an “ultimate good” function. But Pigou recognized that money was not utility and, in fact, that utility itself was not happiness, pleasure, or satisfaction, but instead a “measure of desire,” as classical utilitarians had held. Pigou, “Some Remarks on Utility,” 58; Pigou, The Economics of Welfare, first ed., 11, 23–30. This definition, inherited from Marshall, made monetary quantification of utility much easier. According to it, people spent money on what they wanted, not necessarily on what would bring them the most happiness. Desires and satisfactions were not assumed to be perfectly in sync, even if they served as approximations of each other. Though he recognized that “the elements of welfare are states of consciousness,” Pigou still sought to link material prosperity to desire and thereby to satisfaction and welfare.
65. Amartya Sen, “The Living Standard,” Oxford Economic Papers 36 (November 1984): 80.
66. John Maloney, The Professionalization of Economics: Alfred Marshall and Dominance of Orthodoxy (New Brunswick, NJ: Transaction, 1991): 176–185.
67. The third criterion, the variability of the dividend, disappeared from the second edition of The Economics of Welfare.
68. See especially part II, chapter III of Pigou, Wealth and Welfare, 104–108, which became part II, chapters II and III of Pigou, The Economics of Welfare, first ed., 114–130. For Marshall on marginal costs and values, see Marshall, Principles, 403–438.
69. Medema, The Hesitant Hand, 62–64. Pigou’s use of money as a rough quantifier of wellbeing led some economists after his death to incorrectly conclude that Pigou conceived of externalities as accounting errors. They read Pigou as believing that the market would not necessarily lead to imperfections, but only that it operated without full transparency due to the difficulty of identifying and calculating the costs and benefits of an economic activity. U. Hla Myint, Theories of Welfare Economics (New York: Reprints of Economics Classics, Augustus M. Kelley, 1965): 178–183. Thinkers who equated Pigou with the quantification of Marshall included Lionel Robbins, and Talcott Parsons in The Structure of Social Action (New York: McGraw-Hill, 1937): 134. See also J. N. Tewari, “What Is Economics?” Indian Journal of Economics (April, 1947), and Israel Kirzner, The Economic Point of View: An Essay in the History of Economic Thought (Auburn, AL: Ludwig von Mises Institute, 1976): 95–96. See also Steven G. Medema, Ronald H. Coase (London: Macmillan, 1994).
70. In his attack on externality theory, Ronald Coase called Pigou’s The Economics of Welfare the “fountainhead” of externality theory. See R. H. Coase, “The Problem of Social Cost,” Journal of Law and Economics 3 (October 1, 1960): 3, 28. Francis M. Bator was the first to use the term “externality.” Francis M. Bator, “The Simple Analytics of Welfare Maximization,” American Economic Review 47, no. 1 (March 1957): 22–59. See also Backhouse and Medema, “Economists and the Analysis of Government Failure.”
71. Pigou, Wealth and Welfare, 7. In the third edition of The Economics of Welfare, Pigou used the example of a factory to illustrate an externality, but not that of pollution. He wrote of a case wherein “the owner of a site in a residential quarter of a city builds a factory there and so destroys a great part of the amenities of the neighbouring sites; or, in a less degree, when he uses his site in such a way as to spoil the lighting of the houses opposite.” A. C. Pigou, The Economics of Welfare, third ed. (London: Macmillan, 1929): 187–188.
72. Ibid., 8. On industry as destructive of the English landscape, see Martin J. Wiener, English Culture and the Decline of the Industrial Spirit, 1850–1980 (Cambridge: Cambridge University Press, 1981), chapter 4.
73. Pigou, Wealth and Welfare, 159
74. Just as there could be uncharged losses, there could also be profits that went unaccounted. Pigou claimed that establishing new forests had a hidden benefit; railway developments bore untold dividends for connected communities; and good building arrangements might improve “general organization of steadiness in the employment of labor.” Ibid. Through his work on externalities, Pigou has been influential in the history of environmental economics. William Baumol and Wallace E. Oates note that Pigou “showed why the performance of a profit system in supplying social amenities is apt to be less satisfactory,” and that this was key to understanding the economics of environmental protection. William J. Baumol and Wallace E. Oates, Economics, Environmental Policy, and the Quality of Life (Englewood Cliffs, NJ: Prentice-Hall, 1979), 72. Agnar Sandmo, “The Early History of Environmental Economics,” Review of Environmental Economics and Policy 9, no. 1 (January 2015): 43–63.
75. Pigou, The Economics of Welfare, first ed., 11, 160.
76. The first edition of The Economics of Welfare passed over the specific ways of calculating such economic costs and benefits, noting that calculability was “of formal as opposed to real importance.” Ibid., 160–161.
77. Pigou, The Economics of Welfare, third ed., 160.
78. Ibid., 185–186n. See also Sandmo, “The Early History of Environmental Economics,” 23.
79. Pigou, Wealth and Welfare, 148–171.
80. See Medema, The Hesitant Hand, 60–65.
81. Pigou, Wealth and Welfare, 164.
82. See Nahid Aslanbeigui and Steven G. Medema, “Beyond the Dark Clouds: Pigou and Coase on Social Cost,” History of Political Economy 30, no. 4 (Winter 1998): 601–625; Medema, The Hesitant Hand, 60–65.
83. Pigou, Wealth and Welfare, 164.
84. This turn of phrase first appeared in the second edition of The Economics of Welfare, but it was implied in the first edition. Pigou, The Economics of Welfare, second ed., 79; Pigou, The Economics of Welfare, first ed., 52–53.
85. Pigou, The Economics of Welfare, first ed., 53. In the first edition, Pigou cited the contemporary Italian philosopher Eugenio Rignano for this idea. By the fourth edition, he cited Mill. Pigou, The Economics of Welfare, fourth ed., 89–90.
86. Pigou to Philip Noel-Baker, n.d. [March 1955], The Papers of Baron Noel-Baker, CAC, NBKR 9/58/1.
87. This is distinct from (but not inconsistent with) Aslanbeigui and Oakes’s assertion that Pigou saw his relationship with the government as “whispering into the ear of the prince.” Aslanbeigui and Oakes, Arthur Cecil Pigou, 132.
88. Bernard Williams, “The Point of View of the Universe: Sidgwick and the Ambitions of Ethics,” in Making Sense of Humanity by Bernard Williams (Cambridge: Cambridge University Press, 1995).
89. Sidgwick, Methods of Ethics, quoted in Williams, “The Point of View of the Universe,” 165.
90. Ibid., 166.
91. Ibid. This is a necessarily reductive sketch of Sidgwick. Sidgwick was also convinced that humanity would become more like an ideal community of utilitarians, thereby reducing the gap between elites and the rest of society. See Bart Schultz, Henry Sidgwick: Eye of the Universe: An Intellectual Biography (Cambridge: Cambridge University Press, 2004): 264–272.
92. Hugh Dalton, Call Back Yesterday: Memoirs 1887–1931 (London: F. Muller, 1953): 59.
93. Pigou to R. H. Harrod, n.d. [1949], Harrod Papers, BL, Add. MS 72764, 235.
94. See Daunton, “Welfare, Taxation and Social Justice,” 71. Pigou drew inspiration from B. Seebohm Rowntree’s study Poverty, which noted poor families’ “purchase of food is not always spent in the most economical way,” even when family budgets were strained. B. Seebohm Rowntree, Poverty: A Study of Town Life (London: Macmillan, 1901): 260.
95. Pigou, Wealth and Welfare, 357. This report was “Mr. Jackson’s Report on Boy Labour,” Royal Commission on the Poor Laws, Appendix vol. 20 [Cd. 5068], 1910. Pigou drew extensively from the Minority Report of the same royal commission, for which he had given evidence in 1907.
96. Pigou, Wealth and Welfare, 357. The report was that of the Working of the Education (Provision of Meals) Act 1906 up to 31 March 1909, 1910, Cd. 5131. Although this particular passage did not appear in The Economics of Welfare, its sentiment did. In The Economics of Welfare, Pigou argued that for a transference to be successful, the poor should not receive money, but already purchased goods. The implication was the same as in Wealth and Welfare—that the poor should not be trusted to spend redistributed funds. In The Economics of Welfare, Pigou made clear that transferring money to the poor was also problematic, as money transfers gave the poor an incentive to work less. Pigou, The Economics of Welfare, first ed., 756–760. Moreover, in The Economics of Welfare, Pigou was in favor of mandating the ways in which the poor spent any sort of guaranteed real income. See ibid., 787–798.
97. Pigou, Wealth and Welfare, 358.
98. Ross McKibbin, Classes and Cultures: England, 1918–1951 (Oxford: Oxford University Press, 1998): 106.
99. Pigou, Wealth and Welfare, 248. See also Roger E. Backhouse and Steven G. Medema, “Economists and the Analysis of Government Failure: Fallacies in the Chicago and Virginia Interpretations of Cambridge Welfare Economics,” Cambridge Journal of Economics 36 no. 4 (July 2012): 984; For more on the economic expert in America, see Thomas C. Leonard, Illiberal Reformers: Race, Eugenics and American Economics in the Progressive Era (Princeton, NJ: Princeton University Press, 2016).
Chapter 4: War, Peace, and Disillusionment
1. A. C. Pigou, Unemployment (London: Williams & Norgate, 1913). A. C. Pigou, “Vorlesungen uber Nationalokonomie auf Grundlage des Marginalprinzipes by Knut Wicksell,” Economic Journal 23, no. 92 (December 1913): 605–606; F. W. Taussig and A. C. Pigou, “Railway Rates and Joint Cost,” Quarterly Journal of Economics 27, no. 3 (May 1913): 535–538; F. W. Taussig and A. C. Pigou, “Railway Rates and Joint Costs,” Quarterly Journal of Economics, 27, no. 4 (August 1913): 687–694.
2. Hugh Dalton, Call Back Yesterday: Memoirs 1887–1931 (London: F. Muller, 1953): 58–60.
3. The pair shared a bedroom with two beds while Pigou was a fellow and Corrie an undergraduate, an arrangement that provoked C. R. Fay, the King’s economic historian, to call the pair “Mr. and Mrs. Pigou.” See Nahid Aslanbeigui and Guy Oakes, Arthur Cecil Pigou (Houndmills, Basingstoke, UK: Palgrave Macmillan, 2015): 247–248.
4. D. W. Corrie to John Saltmarsh, February 19, 1960, Papers Relating to A.C. Pigou, KCA, ACP/1/Corrie.
5. Ibid.
6. Copy of the Gownsman, May 26, 1910, Austin Robinson Papers, MLE, EAGR 6/6/4.
7. Ibid.
8. Philip Baker to Elizabeth Balmer Moscrip, n.d., The Papers of Baron Noel-Baker, CCA, NBKR 9/45/8.
9. Nicholas Elliott, Never Judge a Man by His Umbrella (London: Michael Russell, 1991).
10. Pigou to Philip Noel-Baker, n.d. [June 1943], Noel-Baker Papers, CCA, NBKR 9/58/2.
11. Information from author’s conversations with the present owners of Lower Gatesgarth, October 31, 2012.
12. “Copy Duplicate of Conveyance of Freehold Farm Cottage and Land known as Gatesgarth, Buttermere, Cumberland,” W.M.W. Marshall, Esq. to Professor G.M. Trevelyan, O.M., July 30, 1935, Private Collection, Buttermere, United Kingdom.
13. Pigou to Catherine Marshall, February 27, 1906, The Letters of Miss Catherine E. Marshall, Cumbria Archive Centre, Carlisle, United Kingdom, DMAR/2/23. For more on Catherine Marshall, see Jo Vellacott, “Marshall, Catherine Elizabeth (1880–1961),” Oxford Dictionary of National Biography (Oxford: Oxford University Press, 2004), http://www.oxforddnb.com/view/article/38527.
14. On Philip Baker’s early years, see D. J. Whittaker, Fighter for Peace: Philip Noel-Baker 1889–1982 (York, UK: William Sessions, 1989): 1–31. On Trevelyan in Cumbria, see Elliott, Never Judge a Man by His Umbrella, 66–67. On Trevelyan in Italy, see David Cannadine, G.M. Trevelyan: A Life in History (New York: W. W. Norton & Company, 1992): 80–81. Trevelyan was neither a pacifist nor a conscientious objector; he joined a Red Cross ambulance unit because of poor eyesight.
15. Pigou to Josephine Baker, n.d. (1914), Noel-Baker Papers, CCA, NBKR 9/45/4.
16. Pigou to Josephine Baker, n.d. (March 1915), Noel-Baker Papers, CCA, NBKR 9/46/2.
17. Ibid.
18. Photos of Pigou, June 12, 1915, Pigou Papers, KCA, ACP/3/1.
19. John Saltmarsh and Patrick Wilkinson, Arthur Cecil Pigou, 1877–1959, Fellow and Professor of Political Economy (Cambridge: King’s College, 1960): 8–9.
20. Ibid.
21. Harry G. Johnson, “Arthur Cecil Pigou, 1877–1959,” Canadian Journal of Economics and Political Science / Revue canadienne d’Economique et de Science politique 26, no. 1 (February 1960): 153.
22. Christopher N. L. Brooke, A History of the University of Cambridge, Volume IV, 1870–1990 (Cambridge: Cambridge University Press, 1993): 331.
23. Ibid., 333–334; G. R. Evans, The University of Cambridge: A New History (London: I. B. Tauris, 2010): 25–26.
24. See Brooke, A History of Cambridge, 335–340.
25. Dennis Robertson (1890–1962), who joined up, wrote to J. M. Keynes, that “Of some of one’s other friends one feels that death was the most useful thing of which they were capable.” Robertson saw even passive acceptance of Germans as treacherous. “I wish L-G [David Lloyd George] had put a heavy tax on any further mention in print of the names Nietzsche, Treitschke or Berhardt.” Dennis Robertson to J. M. Keynes, November 19, 1914, The Papers of John Manyard Keynes, KCA, JMK/L/R 6.
26. Pigou’s exemption was a close call and attracted national media attention. Aslanbeigui suggests that departmental politics fomented debate over whether Pigou was needed at Cambridge, with a disgruntled Foxwell stirring up unrest. Nahid Aslanbeigui, “Foxwell’s Aims and Pigou’s Military Service: A Malicious Episode?” Journal of the History of Economic Thought 14 (1992): 96–109. Maloney suggests that Foxwell only felt snubbed that others thought him incapable of substituting for Pigou. John Maloney, The Professionalization of Economics: Alfred Marshall and Dominance of Orthodoxy (New Brunswick, NJ: Transaction, 1991): 224–225.
27. “Medal Card of Pigou, Arthur C.” 1920, War Office, TNA, WO 372/16/6394.
28. Pigou served on the “Committee of Economists Appointed by the Board of Trade to Consider the Probable State of Industry after the War with Special Reference to Employment.” Other economists included William Ashley and Edwin Cannan. Each was assigned a set of industries to analyze. Pigou’s were “building trades, quarries, brick and cement trades, wood and furniture trades.” He also devised the general scheme for the report and, together with his friend J. H. Clapham, wrote an introduction and assembled the full document of 89 folio pages. “The General Report of the Committee of Economists Appointed by the Board of Trade to Consider the Probably State of Industry after the War with Special Reference to Employment,” Sir William Ashley Papers, British Library, Add MS 42247, 245–289. See also William Ashley’s papers relating to the committee. Sir William Ashley Papers, British Library, Add MS 42247, 158–244. See especially “Minutes of the Second Meeting,” Feburary 9, 1917, Add. MS 42247, 212, and J. H. Clapham to W. J. Ashley, March 5, 1917, Ashley Papers, BL, Add. MS 42247, 217.
29. See Michael Bentley, The Liberal Mind, 1914–1929 (Cambridge: Cambridge University Press, 1977), chapter 1; and Trevor Wilson, The Downfall of the Liberal Party, 1914–1935 (London: Collins, 1966), chapter 3.
30. A. C. Pigou, “Terms of Peace,” unpublished manuscript, c. 1915–16, Arthur Cecil Pigou Papers, MLE, Pigou 1/5/2, 6.
31. Of this letter, Pigou would comment, “Not Dante himself devised for his enemies a punishment less enticing!” A. C. Pigou, Economics in Practice (London: Macmillan, 1935): 153.
32. Donald Winch, “Keynes and the British Academy,” Historical Journal 57, no. 3 (September 2014): 760–763.
33. Navy List (February 1919): 729.
34. Navy List (January 1919): 386; Navy List (June 1919): 767.
35. Peter Groenewegen, A Soaring Eagle: Alfred Marshall 1842–1924 (Aldershot, UK: Edward Elgar, 1995): 643.
36. The petition appeared in a memorandum prepared by Winston Churchill, then the secretary of state for war. Winston S. Churchill, “Conscientious Objectors.” Memorandum prepared for the Prime Minister, 1919, Cabinet Papers and Minutes, TNA, CAB 24/75, 6873.
37. Pigou, “Terms of Peace,” 5, 8–9.
38. Pigou was dismissing the so-called Naturalistic Fallacy—the notion that because something occurred naturally, it was worthy. Moore had engaged the naturalistic fallacy “and of it . . . endeavor[ed] to dispose.” G. E. Moore, Principia Ethica, rev. ed. (Cambridge: Cambridge University Press, 1993): 62, 65–66.
39. Pigou, “Terms of Peace,” 16.
40. Michael Barratt Brown, The Evolution of the Friends’ Ambulance Unit (1914 and 1939) (London: Friends’ Ambulance Unit, July 1943): 5. See also Meaburn Tatham and James E. Miles, eds., The Friends’ Ambulance Unit, 1914–1916: A Record (London: Swarthmore Press, 1919): 249–250. About half of the unit consisted of Quakers. See Thomas C. Kennedy, British Quakerism, 1860–1920: The Transformation of a Religious Community (Oxford: Oxford University Press, 2001): 315–316.
41. Pigou published on wartime economics over the course of the war. Much appeared in The Political Economy of War, which came out in 1921. A .C. Pigou, The Economy and Finance of the War (London: Dent, 1916); A. C. Pigou, “Interest after the War and the Export of Capital,” Economic Journal 26, no. 104 (December 1916): 413–424; A. C. Pigou, “The Economics of the War Loan,” Economic Journal 27, no. 105 (March 1917): 16–25; A. C. Pigou, “Inflation,” Economic Journal 27, no. 108 (December 1917): 486–494; A. C. Pigou, “A Special Levy to Discharge the War Debt,” Economic Journal 28, no. 110 (June 1918): 135–156; A. C. Pigou, “Government Control in War and Peace,” Economic Journal 28, no. 112 (December 1918): 363–373.
42. A. C. Pigou, “The Value of Money,” Quarterly Journal of Economics 32, no. 1 (November 1917): 38–65.
43. On taxation as a tool of justice, see Martin Daunton, Just Taxes: The Politics of Taxation in Britain, 1914–1979 (Cambridge: Cambridge University Press, 2007), especially chapter 3. See also Groenewegen, A Soaring Eagle, 644–646; William Harbutt Dawson, ed. After-war Problems (London: Allen & Unwin, 1918).
44. Nahid Aslanbeigui and Guy Oakes, Arthur Cecil Pigou (Houndmills, Basingstoke, UK: Palgrave Macmillan, 2015): 108.
45. A. C. Pigou, “The Burden of War and Future Generations” Quarterly Journal of Economics 33 (1919): 241–255. Future generations were important in Pigou’s work. David Collard, “Pigou and Future Generations,” Cambridge Journal of Economics 20 (1996): 585–597.
46. A. C. Pigou, “The Need for More Taxation.” Economist (December 9, 1916): 1087. Pigou favored a special wartime tax but strongly opposed it only being levied on the men of military age as it was in Italy. Pigou asserted: “It has often been said that this is a young man’s war, and for the work of actual fighting, that is, of course, true. Young men embody the main part of the nation’s physical strength. But old men embody a great part of its financial strength. They are largely instrumental in making others fight; ought they not themselves be made to pay?”
47. Ibid.
48. Ibid.
49. A. C. Pigou, “A Capital Levy after the War,” Undated typescript, in “Essays on Government Indebtedness,” Keynes Papers, KCA, JMK/T/22, 40. See also Daunton, Just Taxes, chapter 3.
50. Pigou to Macmillan, November 23, 1918, Macmillan Papers, BL, Add. MSS 55199, 49.
51. Pigou to Macmillan, November 7, 1915, Macmillan Papers, BL, Add. MSS 55199, 47. This is the same title as Pigou’s inaugural address as professor.
52. Pigou to Macmillan, December 20, 1918, Macmillan Papers, BL, Add. MSS 55199, 50.
53. A. C. Pigou, The Political Economy of War, second edition (New York: Macmillan, 1941): 47. On taxes and loans, see chapter VII, 72–94.
54. This referenced Marshall’s 1907 call for “economic chivalry.” Alfred Marshall, “Social Possibilities of Economic Chivalry,” Economic Journal 17, no. 65 (March 1907): 7–29. The eugenics chapter, “Eugenics and Some Wage Problems” appeared first in the Eugenics Review in April 1923. A. C. Pigou, Essays in Applied Economics (London: P. S. King & Son, 1923): 80–91. This piece concluded that eugenicists could not engineer a perfect society and that it was similarly impossible to predict the outcomes of policies on genetic quality. On economic chivalry, Pigou noted there were financial as well as moral benefits to treating workpeople well. Good conditions maintained worker health and prevented costly strikes. Workplace philanthropy fostered a spirit of cooperation rather than mere patronage. Citing the work of utopian socialist Robert Owen, Pigou concluded, “it is through comradeship, not through autocracy, that the good life grows.” Pigou, Essays in Applied Economics, 23.
55. See, e.g., William Beveridge, British Food Control (Oxford: Oxford University Press, 1928); E.M.H. Lloyd, Experiments in State Control at the War Office and the Ministry of Food (Oxford: Clarendon Press, 1924); Leo Chiozza Money, The Triumph of Nationalization (London: Cassell, 1920).
56. A. C. Pigou, “The Private Use of Money,” in Pigou, Essays in Applied Economics, 2.
57. Ibid., 1–2. Pigou retained his multivariable good function. “It is true, no doubt, that the things which money can buy are not the best things—kindness and youth under open skies, comradeship of true friends in pleasure or difficulty or danger, a word, a silence, a smile, love that moves the sun and other stars. But, though the best things are not purchasable, they . . . need some modicum of purchasable things as a foundation.”
58. Ibid., 1.
59. Though Marshall gave evidence to several committees over the course of his life, he was an infrequent member of such bodies. See Groenewegen, A Soaring Eagle, chapter 11; Aslanbeigui and Oakes, Arthur Cecil Pigou, 132.
60. See Reports and Minutes of Evidence on the Second Stage of Inquiry of the Coal Industry Commission [Cmd. 360], 1919, 423, cited in Aslanbeigui and Oakes, Arthur Cecil Pigou, 261. Aslanbeigui and Oakes argue that Pigou’s framework of pros and cons and “guarded, and hedged, and qualified” judgments were central to what they call his theory of policy analysis. See ibid., 97.
61. See Barry Eichengreen, “The British Economy Between the Wars,” in The Cambridge Economic History of Modern Britain, ed. Roderick Floud and Paul Johnson (Cambridge: Cambridge University Press, 2004): 314–343.
62. On Lloyd George and labor, see chapter 3 of Kenneth O. Morgan, Concensus and Disunity (Oxford: Clarendon Press, 1979): 46–79; Peter Clarke, The Keynesian Revolution in the Making, 1924–1936 (Oxford: Clarendon Press, 1988): 106–108.
63. Saltmarsh and Wilkinson, Arthur Cecil Pigou, 18.
64. J. M. Keynes Economic Consequences of the Peace (London: Macmillan, 1919).
65. Cited in Dalton, Call Back Yesterday, 113–114.
66. See chapters 2 and 3 of Clarke, The Keynesian Revolution in the Making, 28–69. See also Robert W. D. Boyce, British Capitalism at the Crossroads: A Study in Politics, Economics, and International Relations (Cambridge: Cambridge University Press, 1987): 30–31.
67. The vast majority of the committee, which was chaired by Bank of England Governor Walter Cunliffe, worked in the financial industry. Members included Charles Addis of the Hongkong and Shanghai Banking Corporation; George Goschen, a businessman who had been Chancellor of the Exchequer; and Gaspard Farrer, a chairman of Baring Brothers. Minutes of the First Meeting, February 2, 1918, Committee on Currency and Foreign Exchange (Cunliffe Committee), TNA, T185/1, 82.
68. Boyce, British Capitalism at the Crossroads, 31. See also Martin J. Wiener, English Culture and the Decline of the Industrial Spirit, 1850–1980 (Cambridge: Cambridge University Press, 1981).
69. “Memorandum prepared by Professor Pigou on Fiduciary Note Issue after the War,” March 6, 1918, Cunliffe Committee, TNA, T185/1, 96–102; “Note by Professor Pigou on the Proposal to Prohibit Gold Import Except to the Bank of England and to Sell Gold for Use in the Arts at a Premium,” March 6, 1918, Cunliffe Committee, TNA, T185/1, 103–104; A. C. Pigou “The Effect of Amalgamating the Issue and Banking Departments of the Bank of England,” 1918, Cunliffe Committee, TNA, T185/1, 143–144.
70. A. C. Pigou “The Effect of Amalgamating the Issue and Banking Departments of the Bank of England,” 1918, Cunliffe Committee, TNA, T185/1, 143–144.
71. Pigou rarely asked witnesses questions. For some of the few examples, see the questioning of Walter Leaf in Minutes of the Fifteenth Meeting, May 27, 1918, Cunliffe Committee, TNA, T185/1, 300–302; of Sir James Hope Simpson, in Minutes of the Eighteenth Meeting, June 3, 1918, Cunliffe Committee, TNA, T185/1, 341; of Drummond Fraser, in Minutes of the Nineteenth Meeting, June 4, 1918, TNA, T185/1, 362; and of Felix Schuster in Minutes of the Thirty-Second Meeting, October 16, 1918, Cunliffe Committee, TNA, T185/1, 732. One area about which Pigou was uncharacteristically vocal was that of reserve ratios. Pigou worried that banks, especially the Bank of England, were exposing themselves to too much risk, and he expressed interest in ensuring that the Bank of England maintained significant gold reserves. See Minutes of the Second Meeting, February 25, 1918, TNA, T185/1, 86, and Minutes of the Fourth Meeting, March 4, 1918, Cunliffe Committee, TNA, T185/1, 104. See also A. C. Pigou, Industrial Fluctuations (London: Macmillan, 1927), part II, chapter VII, “Problems Connected with the Supply of Currency.”
72. Boyce, British Capitalism at the Crossroads, 31. The Committee received 21 submissions of evidence. Only one was arguably the “expression of industrial opinion.” Though the report did not stress the return to gold, the Committee noted, “we are glad to find that there was no difference of opinion among the witnesses who appeared before us.” Cunliffe Committee, First Interim Report, [Cmd. 9182], 5.
73. Charles Maier contends that the search for stability was one of the key political economic issues of the twentieth century. Charles Maier, In Search of Stability: Explorations in Historical Political Economy (Cambridge: Cambridge University Press, 1987). On the uncertainty of the period, see Harold James, The End of Globalization: Lessons from the Great Depression (Cambridge, MA: Harvard University Press, 2001).
74. In the only memorandum he wrote for the League of Nations, Pigou supported gold as a way of keeping world economies together. See A. C. Pigou, “Memorandum on Credit, Currency, and Exchange Fluctuations,” in Documents de la conférence: Conférence financière internationale, Bruxelles, 1920: Memoranda d’experts en matière économique, League of Nations (London: Harrison, 1920). See also Aslanbeigui and Oakes, Arthur Cecil Pigou, 128.
75. “Back to Sanity,” Economist (November 2, 1918): 618–620.
76. See Fuad Shehab, Progressive Taxation: A Study in the Development of the Progressive Principle in the British Income Tax (Oxford: Clarendon, 1953).
77. N. F. Warren Fisher, “Memorandum on the Royal Commission on the Income Tax,” prepared for the Chancellor of the Exchequer, February 6, 1919, Royal Commission on the Income Tax, TNA, T 172/985.
78. Pigou to N. F. Warren Fisher, February 23, 1919, Royal Commission on the Income Tax, TNA, T 172/985.
79. Austen Chamberlain to N. F. Warren Fisher, August 8, 1919, Royal Commission on the Income Tax, TNA, T 172/985.
80. On the tax commission, see B. E. V. Sabine, A History of Income Tax (London: Allen and Unwin, 1966): 157–162.
81. Report of the Royal Commission on the Income Tax [Cmd. 615], 1920, 1.
82. A. C. Pigou, “The Report of the Royal Commission on the British Income Tax” Quarterly Journal of Economics 34, no. 2 (August 1920): 607.
83. Daunton, Just Taxes, 105–106.
84. A. C. Pigou, “Co-operative Societies and Income Tax,” Economic Journal 30, no. 118 (June, 1920): 156. Pigou noted that though Cooperative Societies (especially retailers) did produce non-monetary income (for the consumer), in general, non-money incomes were not taxed, and the amount of money that was in the balance was not enough to justify a deviation from the rule. See also A. C. Pigou, “Mr. and Mrs. Webb on Consumers’ Co-Operation,” Economic Journal 32, no. 125 (March 1922): 53–57.
85. Frederick Henry Smith, Lord Colwyn, to Austen Chamberlain, August 7, 1919, Royal Commission on the Income Tax, TNA, T 172/985.
86. Minutes of Meeting, July 2, 1920, Royal Commission on the Income Tax, TNA, IR 85/4, 109; Minutes of Meeting, October 8, 1919, Royal Commission on the Income Tax, TNA, IR 85/8, 223.
87. Pigou, “The Report of the Royal Commission,” 607.
88. Ibid., 619.
89. Ibid.
90. Cheekily, he added: “He may even, if he so chooses, discover in these records hints of devices by which he himself may evade payment to the Revenue of moneys that are properly due!” Ibid., 625.
91. Boyce, British Capitalism at the Crossroads, 32–33.
92. On Lloyd George’s thinking during this period, see Roy Hattersley, David Lloyd George: The Great Outsider (London: Little, Brown, 2010), chapters 32 and 33. See also of Kenneth O. Morgan, Consensus and Disunity: The Lloyd George Coalition Government 1918–1922 (Oxford: Clarendon Press, 1979), chapter 11.
93. Frank Trentmann, Free Trade Nation: Commerce, Consumption, and Civil Society in Modern Britain (Oxford: Oxford University Press, 2008): 189–190.
94. On the war and the Liberal Party’s decline, see Wilson, The Downfall of the Liberal Party; Bentley, The Liberal Mind.
95. Dalton, Call Back Yesterday, 122–129. See also F. W. Pethick Lawrence, The Capital Levy: How the Labour Party Would Settle the War Debt (London: Labour Party, 1920).
96. Labour Party, Labour and the War Debt: A Statement of Policy for the Redemption of War Debt by a Levy on Accumulated Wealth (London: Labour Party, 1922). See also Richard Whiting, The Labour Party and Taxation: Party Identity and Political Purpose in Twentieth-Century Britain (Cambridge: Cambridge University Press, 2000): 25–34; and Dalton, Call Back Yesterday, 129.
97. Fear of a levy gripped the financial community. Immediately after Labour formed a government in 1923, the Governor of the Bank of England, Montagu Norman, relaxed restrictions on capital movement so that the wealthy would be able to shelter their assets.
98. In 1918, Pigou had suggested doubling the rates for the current estate tax, which would make the top bracket taxed at 40 percent. See Pigou, “A Special Levy to Discharge War Debt,” 154–155.
99. A. C. Pigou, “Capital Levy: Matters for a Royal Commission,” Times (May 1, 1923): 9; Dalton, Call Back Yesterday, 122.
100. A. C. Pigou, “Capital Levy,” Times (May 7, 1923): 8.
101. Ibid.
102. Pigou’s letters to the Times appeared before Andrew Bonar Law (1858–1923) resigned as prime minister and his successor, Stanley Baldwin, announced a new election scheduled for 1923. Thus, Pigou’s words should not be taken as endorsing a Labour position in the 1923 election.
103. On Norman, see Liaquat Ahamed, Lords of Finance: The Bankers who Broke the World (New York: Penguin, 2009), especially chapter 12.
104. Boyce, British Capitalism at the Crossroads, 64–66. See also Charles P. Kindleberger, The World in Depression, 1929–1939 (Berkeley: University of California Press, 1973), chapter 2. Adam Tooze sees the rivalry between Britain and the United States around World War I in stark terms. Adam Tooze, The Deluge: The Great War, America and the Remaking of the Global Order (New York: Penguin, 2015).
105. See, for instance, Pigou’s 1920 memorandum for the League of Nations: Pigou, “Memorandum on Credit, Currency, and Exchange Fluctuations,” in Documents de la conférence: Conférence financière internationale, Bruxelles, 1920: Memoranda d’experts en matière économique, League of Nations (London: Harrison, 1920).
106. See D. E. Moggridge, British Monetary Policy, 1924–1931, The Norman Conquest of $4.86 (Cambridge: Cambridge University Press, 1972), especially chapter 3.
107. Boyce, British Capitalism at the Crossroads, 66–67; Richard Sidney Sayers, The Bank of England, 1891–1944, Volume 1 (Cambridge: Cambridge University Press, 1976): 136.
108. Moggridge, British Monetary Policy, 38. Moggridge offers a comprehensive overview of the committee’s work on 37–51.
109. Montagu Norman to Otto Niemeyer, April 16, 1922, Committee to Consider Currency, Note Issues, and the Gold Standard, TNA, T 160/197 F 7528, 10.
110. Norman and Niemeyer were still keen to have Pigou serve even after he notified them that he would be abroad for much of the summer. Pigou to Otto Niemeyer, May 22, 1924, Committee to Consider Currency, TNA, T 160/197 F 7528, 19; Pigou to Otto Niemeyer, June 12, 1924, Committee to Consider Currency, TNA, T 160/197 F 7528, 30.
111. Moggridge, British Monetary Policy, 38; Boyce, British Capitalism at the Crossroads, 66–67.
112. Another witness, the Liberal politician Reginald McKenna, was opposed to the return to gold. Ibid., 42.
113. Not only would it “absolutely cut from under our feet” the British export trade, it would cause a collapse in credit. Keynes prioritized stable domestic prices over stable exchanges. Testimony of John Maynard Keynes, July 11, 1924, Committee to Consider Currency, TNA, T 160/197 528/02/2, 14. Also published in The Collected Writings of John Maynard Keynes, vol. XIX, 257. See also Robert Skidelsky, John Maynard Keynes: The Economist as Saviour 1920–1937 (London: Macmillan, 1992): 153–160, 191–193; Moggridge, British Monetary Policy, 42–43; John Maynard Keynes, A Tract on Monetary Reform (London: Macmillan, 1923).
114. Skidelsky, The Economist as Saviour, 193.
115. Pigou’s Copy of the Minutes of the Meetings of the Committee on the Currency and Bank of England Note Issues, Pigou Papers, MLE, Pigou 4. See Michael McLure, “A.C. Pigou’s Membership of the ‘Chamberlain-Bradbury’ Committee Part I: The Historical Context,” Discussion Paper 14.04 (Perth: Business School, University of Western Australia, 2014); Michael McLure, “A. C. Pigou’s Membership of the ‘Chamberlain-Bradbury’ Committee Part II: “Transitional” and “Ongoing” Issues,” Discussion Paper 14.05 (Perth: Business School, University of Western Australia, 2014).
116. Pigou was interested in the extent to which businessmen were swayed by general sentiment as opposed to concrete economic indicators. Revised Proof of Minutes of the Committee on the Currency and Bank of England Note Issues, June 27, 1924, Committee to Consider Currency, TNA, T 160/197 F 7528/02/1, 16–21.
117. Compare to Aslanbeigui and Oakes, Arthur Cecil Pigou, 125–130. Notwithstanding Pigou’s hestitation, the committee’s final report strongly recommended “that the early return to the gold basis should forthwith be declared the irrevocable policy of His Majesty’s Government.” Report of the Committee on the Currency and Bank of England Note Issues [Cmd. 2393], 1925, 6. Gaspard Farrer to N. E. Young, September 6, 1924, Committee to Consider Currency, TNA, T 160/197 F 7528/01/2, 2–3.
118. Emphasis added. N. E. Young to Sir John Bradbury, September 12, 1924, Committee to Consider Currency, TNA, T 160/197 F 7528/01/2, 32. N. E. Young was the Committee’s secretary. See also Moggridge, British Monetary Policy, 48–49.
119. In the same letter from N. E. Young to Sir John Bradbury, Young referred to Pigou’s declaration of political detachment as “flabbiness.” The “wait and see” policy was the one urged by Keynes and others, who predicted American inflation, which would make returning to gold less painful. Boyce, British Capitalism at the Crossroads,70. See also Moggridge, British Monetary Policy, 47–51.
120. Ibid. See also Boyce, British Capitalism at the Crossroads.
121. Boyce, British Capitalism at the Crossroads, 70.
122. Ibid., 71–78; Moggridge, British Monetary Policy, chapter 3.
123. A. C. Pigou, “In Memoriam: Alfred Marshall, a Lecture Delivered in Cambridge Oct 24, 1924,” in Memorials of Alfred Marshall, edited by A. C. Pigou (London: Macmillan: 1925): 84.
124. After he left the committees, Pigou published only two letters until the Great Depression. A. C. Pigou “Economics at the Universities,” Times (November 19, 1926): 15; A. C. Pigou, “Safeguarded Industries,” Times (November 17, 1928): 8.
125. This does not include a letter he wrote as part of his official capacity as a member of the Bradbury Commission. See John Bradbury, Gaspard Farrer, O. E. Niemeyer, and A. C. Pigou, “Return to Gold Standard,” Times (April 19, 1925): 11.
126. A. C. Pigou, “An Economist’s Apologia,” in Economics in Practice: Six Lectures on Current Issues, by A. C. Pigou (London: Macmillan, 1935): 7–8.
127. A. C. Pigou, Wealth and Welfare (London: Macmillan, 1912): 70. See also Roger E. Backhouse and Steven G. Medema, “Economists and the Analysis of Government Failure: Fallacies in the Chicago and Virginia Interpretations of Cambridge Welfare Economics,” Cambridge Journal of Economics 36 no. 4 (July 2012): 981–994.
128. A. C. Pigou, “Empty Economic Boxes: A Reply,” Economic Journal 32, no. 128 (December 1922): 462. See also Pigou, “An Economist’s Apologia,” 8–9.
129. Pigou, “An Economist’s Apologia,” 7–10. The letter to the Times in question was likely A. C. Pigou, “The Economics of Mr. Balfour’s Manifesto,” Times (September 18, 1903): 4.
130. A. C. Pigou, “State Action and Laisser Faire,” in Economics in Practice: Six Lectures on Current Issues by A. C. Pigou (London: Macmillan, 1935): 125. Steven Medema argues that this essay—which suggested that the state was always already invested in a laissez-faire system—is vital to understanding Pigou’s stance on market interventionism. See Steven G. Medema, “Pigou’s ‘Prima Facie Case’: Market Failure in Theory and Practice,” in No Wealth but Life, ed. Roger E. Backhouse and Tamotsu Nishizawa (Cambridge: Cambridge University Press, 2010): 42–61; Steven G. Medema, The Hesitant Hand: Taming Self Interest in the History of Economic Ideas (Princeton, NJ: Princeton University Press, 2009): 65–72.
131. Pigou, “An Economist’s Apologia,” 25.